A class action lawsuit was filed in Louisiana against online sports betting companies FanDuel and DraftKings, accusing them of designing and marketing their apps to encourage and exploit addictive gambling behaviors.
Lawsuit Filed Against FanDuel and DraftKings
According to the lawsuit, the companies use a predatory data-tracking system to identify and target vulnerable or compulsive gamblers. It further argues that these apps are not simply neutral gambling platforms, but unreasonably dangerous products with fundamentally flawed designs.
The plaintiffs, Adrian Payton, Toi Smith and Yolanda Perkins, are New Orleans residents who each wagered more than $20,000 on one or both platforms. They are bringing the lawsuit on behalf of Louisiana residents who have created accounts, deposited funds, and used the mobile sports betting apps developed and operated by the sportsbook defendants under the regulatory oversight of the casino anchor defendants.
While it’s obviously still very early to say what the outcome of this lawsuit would be, it’s still a storm on the defendants’ side. And It’s not like the defending companies don’t have their legal departments’ hands full with all the ongoing lawsuits going on across the US. For example, earlier this month, FanDuel suffered a legal setback in a shareholder lawsuit brought by the company’s co-founder, Nigel Eccles, and more than 100 other plaintiffs.
DraftKings isn’t in a much better condition, as they are already having some issues operating in Louisiana. Earlier this month, the operator failed to secure a full license, and instead, the Louisiana Gaming Control Board extended DraftKings’ existing license for four months as it is looking into how the company uses AI in its products.
What Do the Plaintiffs Want?
Back to the newest lawsuit, the plaintiffs argue that customers who continue betting despite repeated losses, often due to gambling addiction, may eventually stop using the platforms, resulting in lost business for the sportsbooks. It alleges that DraftKings and FanDuel therefore rely on strategies to keep customers betting even as they lose money, while attracting new users to their platforms. According to the complaint, these strategies include targeted promotions, artificial intelligence, and app interfaces designed to make gambling easy to start but difficult to stop.
The plaintiffs are seeking refunds of all net funds deposited into FanDuel and DraftKings accounts, calculated by subtracting withdrawn winnings from total deposits. They are also seeking compensatory damages for severe mental anguish and emotional distress, the disruption of family and domestic relationships allegedly caused by the addictive nature of the platforms, and the costs of mental health treatment for clinically diagnosed gambling disorders.
If the lawsuit doesn’t go the way of the defendants, they might lose reputation, which could also harm the soft monopoly that they enjoy in Louisiana. Online sports betting officially launched in the state in January 2022. The lawsuit states that FanDuel and DraftKings collectively held 75% of Louisiana’s mobile sports betting market in 2023, with FanDuel accounting for 44% of the market, while DraftKings held 31%.
In other news from Louisiana, a couple of weeks ago, one player won $2 million from Powerball.