Baltimore sues FanDuel, DraftKings over promo tactics, lack of safeguards

New York Times

04-04-2025

A lawsuit the city of Baltimore filed Thursday accuses prominent online sportsbooks FanDuel and DraftKings of utilizing user data to target and feed gambling addictions. It also alleges the companies have gone out of their way to avoid implementing user safeguards required in other countries where they operate.
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The lawsuit, which includes Baltimore's city solicitor Ebony Thompson as a plaintiff, points to Maryland Sports Wagering Regulations, arguing the companies have violated a ban on practices 'that may adversely impact the public.'
'DraftKings and FanDuel have sought to guarantee their profitability by cheating, hoping to hook, and then ultimately exploit, as many users as possible,' the lawsuit said.
Baltimore's mayor Brandon Scott issued a statement to multiple outlets regarding the litigation: 'These companies are engaging in shady practices, and the people of our city are literally paying the price. 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.'
According to the lawsuit, bettors in Maryland wagered more than $5 billion between July 2023 and June 2024, and wagers from the state have eclipsed $3.7 billion since October. FanDuel and DraftKings collectively control 70 to 75 percent of online sports betting in the United States overall, according to a March report by LinkedIn.
'FanDuel does not comment on specific allegations in pending litigation,' the company said Friday. 'We are confident the company operates in accordance with all laws, including those established and enforced by the State of Maryland's Lottery and Gaming Control Commission.'
DraftKings declined to comment on the lawsuit.
At the center of the complaint is the companies' selective use of user data. Both sportsbooks collect extensive banking and personal information to inform how and when to encourage people to bet more. However, Baltimore officials said neither company uses that information to assess whether users are forming unhealthy habits or making risky wagers they cannot afford. The lawsuit argues that dissonance illustrates how the companies prioritize profits over harm reduction.
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'Given the amount of data they have on their consumers, Defendants' failure to do income verification checks allows them to profess ignorance or, at best, remain willfully ignorant, that many so-called 'high rollers' in their VIP programs are demonstrating the hallmark signs of a gambling disorder,' the lawsuit said. 'This, in turn, allows them to cloak themselves in plausible deniability and claim that they do not know whether members of their VIP programs have such disorders, all while collecting troves of behavioral data that allow them to target the most vulnerable.'
The suit also criticizes the torrent of promotional offers both sportsbooks use to lure in gamblers. The text messages, notifications and push alerts users receive create 'the false idea that users are obtaining 'free bets,' or otherwise taking on substantially less financial risk than they actually are,' the suit said.
Such practices could be particularly harmful for those struggling with addiction, teens and others who may not look deeper into the offers' fine print, according to the suit.
The lawsuit additionally cites a 2016 study published in the Journal of Gambling Studies that found partners of 'problem gamblers' are 10 1/2 times more likely to be hospitalized with physical injuries versus partners of 'problem drinkers.' It also said children of individuals with gambling problems are two to three times more likely to be abused than those from other households.
'As some researchers have suggested, the same behavioral data that can be used to identify problem gamblers and build tools to most efficiently exploit those gamblers can also be used to create socially responsible tools that can help combat the addictive behavior of these same individuals,' the lawsuit said.
Additional safeguards the Baltimore officials would like to see include financial vulnerability checks and stronger protections for people under 25, which are mandatory for sportsbooks in the United Kingdom.
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The city is asking the court to order that FanDuel and DraftKings implement similar measures in the U.S. as well, alongside financial penalties for violations of the Baltimore city code.
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