DraftKings, FanDuel Face Major Lawsuit Over 'Shady Practices'
Prominent sportsbooks DraftKings and FanDuel are facing a major lawsuit as the city of Baltimore has accused the two sportsbooks of deceptive and unfair practices to target and exploit vulnerable gamblers.
The lawsuit, which was filed on Thursday, claims that the two sportsbooks use misleading promotions to attract bettors and then leverage data and analytics to keep problem gamblers betting.
Baltimore Mayor Brandon Scott issued a statement on the lawsuit, calling out the two sportsbooks for "shady practices."
"These companies are engaging in shady practices, and the people of our city are literally paying the price," Scott said in a statement via ESPN. "DraftKings and FanDuel have specifically targeted our most vulnerable residents -- including those struggling with gambling disorders -- and have caused significant harm as a result. This lawsuit is a critical step to hold them accountable and protect all Baltimoreans."
The lawsuit explains that the companies lure bettors in with "bonus bets," which are credits that can only be used at the sportsbook. These credits often expire shortly after sign-up, encouraging frequent betting and risk-free winning immediately after sign-up.
"Defendants are not interested in people merely dipping their toes in the water: They want bettors to bet, in significant amounts, over and over," the complaint states. "Some get hooked, and that's the point."
The lawsuit alleges that the companies collect data on bettors and use that data to identify those most likely to gamble more. The lawsuit says that users identified as the most likely to continue gambling are sometimes given exclusive offers and checked in with "to keep these players betting as much as possible."
The lawsuit claims that these practices from the sportsbooks are so well known in the gambling industry that sharp bettors "have learned to mimic the behavior of problem gamblers" in order to receive rewards and maintain higher betting limits.
When reached for comment by ESPN, FanDuel said it would not comment on the allegations while DraftKings did not provide a statement.
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