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DraftKings Lawsuit Advances Amid Deceptive Bonus Claims
SportsGrid
Follow
8/27/2024
Category
🥇
Sports
Transcript
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00:00
You know, Sam, we heard about this last week that DraftKings, there was this lawsuit that
00:07
was potentially going to be filed about some deceptive bonuses that they were offering.
00:12
Tell us more about the story here and if the lawsuit indeed is going to continue.
00:16
Yeah, Craig, this is actually just one of a couple DraftKings lawsuits that we've been
00:23
talking about over the last couple of weeks.
00:25
Just today, you had some news come out about the NFL Players Association suing over the
00:32
NFT Rainmaker marketplace, which is now offline.
00:36
But this story is actually in Massachusetts, like you referred to, deceptive marketing,
00:43
deceptive advertising, if you want to put it that way.
00:46
This one group is essentially saying that the $1,000 signup offer that you have when
00:52
you go on DraftKings basically misleads people, it gets them to sign up to the sports book
00:57
and then they can't figure out how to get the money.
01:02
So essentially, it's accomplishing their plan of attracting customers without actually
01:06
having to shell out the money.
01:08
This group, the Public Health Advocacy Institute, details in its lawsuit about these onerous
01:14
playthrough requirements where you have to initially deposit $5,000 to even become eligible,
01:20
then play through it about $25,000 worth of bets within 90 days to then get your $1,000
01:27
credit, which is non-refundable.
01:29
So this group is really targeting this bonus that's not just in Massachusetts.
01:34
It's been in a lot of these other more recent states that have legalized sports betting.
01:39
And the latest development is that now the case is going to be allowed to move to the
01:42
discovery phase, which is really important.
01:45
The court came out and said, DraftKings, we hear why you want us to dismiss the case,
01:50
but we're not going to buy your argument.
01:51
We're going to allow it to proceed.
01:53
And why that's so important is because in the discovery phase, that's when this group
01:57
is going to be able to press the executives at DraftKings for information on the bonus,
02:01
how many people were able to sign up, what those numbers look like, which is really interesting
02:05
because we rarely get information from the companies about who's actually using the bonuses,
02:10
who's qualifying.
02:12
We get in their earnings reports, hey, this is how much we spent on customer acquisition.
02:16
This is how many new customers we acquired.
02:18
And you've seen over the past couple of years, that trend has gone better for the companies.
02:22
They've been spending less and acquiring more customers.
02:24
Now, is that because they've been able to deceive customers like this group is alleging
02:30
here?
02:31
We'll have to see if that's been the case.
02:32
It could be a number of other reasons, but really interesting and could have a big impact
02:36
on the broader industry as well, especially because this group is one that took down big
02:40
tobacco in the 1980s.
02:42
So they're kind of looking at this as sort of their watershed moment for gambling.
02:45
But the wheels of justice grind slowly.
02:48
So we're gonna have to wait till December for the next development in the case.
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