DraftKings has initiated legal proceedings in federal court against Philadelphia in order to block an investigation into activities of its sportsbook and casino businesses in accordance with city regulations concerning consumer protection.
DraftKings, Crown PA Gaming and Golden Nugget Online Gaming filed a complaint in connection to the subpoena received in April, which demanded information about gambling revenue, advertisements, special promotions for VIP customers, customer targeting methods and compliance with responsible gambling requirements from the companies.
As stated in the lawsuit, earlier in January, information disclosed by city authorities gave DraftKings, Crown PA Gaming and Golden Nugget Online Gaming a reason to ask the courts for help.
DraftKings asserts that the existing law of Pennsylvania establishes an effective system at the state level for protecting consumers and regulating gambling. This legal framework provides for cooperation of law enforcement officials, including the office of the Attorney General, District Attorneys and the Pennsylvania Gaming Control Board. According to DraftKings, Philadelphia does not have any authority to create its own enforcement mechanism in relation to gambling.
Moreover, in the lawsuit, DraftKings refers to some previous Supreme Court decisions concerning the regulation of gambling in Pennsylvania that confirmed that this is the right of statewide authority, rather than local oversight.
Philadelphia argues that Ordinance is designed to target unscrupulous business practices pervading all industries rather than infringing on existing state legislation. The case will help establish whether consumer protection laws are to apply to gambling operators operating under state licenses.