DraftKings Triumphs in New York Deceptive Conduct Lawsuit
DraftKings Prevails in New York Court Over Bonus Advertisement Claims
This week, DraftKings achieved a significant legal win as a federal judge in New York dismissed a proposed class action lawsuit accusing the company of misleading customers with its sign-up bonus offer. The lawsuit, filed by a New York resident named Nerye Aminov, alleged that DraftKings falsely promoted a $1,000 deposit bonus to entice new users.
DraftKings Effectively Clarified Bonus Terms
The plaintiff argued that the bonus conditions, including a $5,000 deposit and placing bets totaling at least $25,000 within 90 days, were hidden in fine print and difficult for typical users to find. However, U.S. District Judge Margo Brodie disagreed with this assertion. Her ruling, issued on Monday, stated that DraftKings had sufficiently disclosed the terms of the bonus.
The court emphasized that no reasonable consumer would expect to receive $1,000 solely by opening an account. Judge Brodie highlighted the bold notice on DraftKings’ deposit screen that clearly stated users could earn “a 20% deposit bonus up to $1,000,” and that these bonus funds would be accumulated through actual gameplay.
A reasonable consumer would not be misled to think that merely signing up for a DraftKings account would entitle them to the full $1,000 deposit bonus.
US District Judge Margo Brodie
A critical part of DraftKings’ defense was that the plaintiff himself had reviewed the bonus conditions before depositing funds and placing bets. The court agreed that disclosures were sufficiently clear and prominently displayed to inform customers about how the bonus offer worked.
Legal Challenges Continue Amid Regulatory Scrutiny
DraftKings requested the court to dismiss the lawsuit entirely, arguing that the plaintiff failed to prove deception, harm, or any legal violations by the company. Judge Brodie concurred, dismissing additional claims related to unjust enrichment and fraudulent inducement. The court also noted that the plaintiff did not separate damages claimed under different allegations.
This decision provides some relief for DraftKings, which recently settled a lawsuit in New Jersey concerning claims that the company exploited an individual’s gambling addiction. Although DraftKings was unable to dismiss that case, they reached a settlement whose details remain confidential.
While the latest ruling alleviates one legal issue for the prominent sports betting operator, DraftKings continues to face ongoing oversight regarding its promotional activities. Nonetheless, lawsuits like these are an expected challenge in the gambling industry, and DraftKings has demonstrated its ability to manage such disputes while prioritizing responsible, sustainable expansion.