DraftKings, an online sports betting company is facing a federal class action lawsuit for using exploitative marketing tactics.
Alleging that the betting firm used exploitative marketing on people struggling with gambling addictions, five people from Pennsylvania have launched a federal class action lawsuit against DraftKings.
The lawsuit, filed in the US District Court for the Eastern District of Pennsylvania, claims that DraftKings failed to follow safe gambling practices. It alleges that the company profited from individuals at risk of gambling-related harm.
As reported by Go Erie, a local news site, Chicago-based civil rights firm Loevy & Loevy is representing five clients in the case. The firm specifically mentions DraftKings’ “no sweat” bets. These promotions allegedly hid important terms in the small print. The lawsuit claims that the bets were not risk-free. Instead, they targeted individuals who were likely to lose large amounts of money.
One plaintiff is a schoolteacher from Pittsburgh with income of around $50,000 a year. Using all of their own funds and then asking for more from family and friends, they lost $134,000 on DraftKings.
Only to reopen it and lose more than $350,000, another plaintiff asked to close their account for good. Their gambling led to serious mental health conditions such as anxiety and post-traumatic stress disorder.
All five plaintiffs claim to be vulnerable users. One of them highlighted that he was able to keep using DraftKings even after enrolling in Pennsylvania’s self-exclusion program.
The criticisms against DraftKings claim that the company uses customer data to target individuals who are prone to excessive gambling. The lawsuit suggests this tactic is both careless and manipulative. It argues that such behavior violates ethical standards and state laws.
DraftKings has not publicly responded to the lawsuit at the time of writing. It comes as Pennsylvania previously began consideration of a bill looking to better protect customers in regulating skill games.
