DraftKings Lawsuit Says $1,000 New-Customer Bonus Is Bogus

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A proposed class action alleges DraftKings’ advertisement of a $1,000 bonus for new customers is unfair and deceptive since a new customer would need to deposit five times that amount and then place $25,000 in bets over the next 90 days in order to receive the so-called bonus.

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The 15-page lawsuit contends that DraftKings’s apparent bonus is structured such that it is “inordinately expensive” for a new, likely inexperienced customer who opens an account and deposits money with the sports betting platform to obtain the $1,000. Instead, a new DraftKings customer is “statistically likely to lose money chasing the bonus,” the suit claims. 

Further, the filing argues that a new DraftKings customer would be unlikely to understand the cost and risk involved in going after the purported $1,000 new customer bonus. The plaintiffs, two Massachusetts consumers, would not have acted upon the defendant’s promotion “had [they] understood the cost or the odds” of winning the $1,000, the case says. 

“[A] new customer of DraftKings was never going to simply receive ‘up to $1,000’ in exchange for signing up for the Sportsbook platform, as the ad implied,” the suit summarizes. 

Per the complaint, a new DraftKings customer would have to satisfy three sizeable requirements in order to obtain the touted $1,000 bonus. Namely, the individual would have to deposit $5,000 up front and then bet $25,000 within 90 days, and those bets would have to carry odds of “-300 or longer,” the lawsuit states. 

“A new consumer could not reasonably have been expected to understand from the face of DraftKings’ advertisements that the $1,000 bonus would not be provided at the time of their initial deposit, but that instead he or she would earn the bonus only $1 at a time for every $25 wagered,” the case reads, stressing that the plaintiffs “did not in fact understand, and could not reasonably have been expected to understand,” the significant caveats tied to the $1,000 bonus. 

The suit calculates that the plaintiffs would have had to wager, on average, more than $276 per day for three months in order to obtain the bonus. 

According to the complaint, DraftKings knew or should have known that its $1,000 bonus promotion was deceptive to its target customers, i.e. consumers new to sports betting and thus “extremely unlikely to understand the details of the promotion, even if it were in readable English on the company’s platform.” The case accuses the online sportsbook of structuring the promotion in a way that stokes the addictive nature of gambling. 

The lawsuit looks to cover all Massachusetts residents who opened an account and deposited money with DraftKings in response to the $1,000 bonus promotion, placed bets through the sportsbook and were damaged thereby.

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