DraftKings Lawsuit Advances Amid Deceptive Bonus Claims

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00:00You know, Sam, we heard about this last week that DraftKings, there was this lawsuit that

00:07was potentially going to be filed about some deceptive bonuses that they were offering.

00:12Tell us more about the story here and if the lawsuit indeed is going to continue.

00:16Yeah, Craig, this is actually just one of a couple DraftKings lawsuits that we've been

00:23talking about over the last couple of weeks.

00:25Just today, you had some news come out about the NFL Players Association suing over the

00:32NFT Rainmaker marketplace, which is now offline.

00:36But this story is actually in Massachusetts, like you referred to, deceptive marketing,

00:43deceptive advertising, if you want to put it that way.

00:46This one group is essentially saying that the $1,000 signup offer that you have when

00:52you go on DraftKings basically misleads people, it gets them to sign up to the sports book

00:57and then they can't figure out how to get the money.

01:02So essentially, it's accomplishing their plan of attracting customers without actually

01:06having to shell out the money.

01:08This group, the Public Health Advocacy Institute, details in its lawsuit about these onerous

01:14playthrough requirements where you have to initially deposit $5,000 to even become eligible,

01:20then play through it about $25,000 worth of bets within 90 days to then get your $1,000

01:27credit, which is non-refundable.

01:29So this group is really targeting this bonus that's not just in Massachusetts.

01:34It's been in a lot of these other more recent states that have legalized sports betting.

01:39And the latest development is that now the case is going to be allowed to move to the

01:42discovery phase, which is really important.

01:45The court came out and said, DraftKings, we hear why you want us to dismiss the case,

01:50but we're not going to buy your argument.

01:51We're going to allow it to proceed.

01:53And why that's so important is because in the discovery phase, that's when this group

01:57is going to be able to press the executives at DraftKings for information on the bonus,

02:01how many people were able to sign up, what those numbers look like, which is really interesting

02:05because we rarely get information from the companies about who's actually using the bonuses,

02:10who's qualifying.

02:12We get in their earnings reports, hey, this is how much we spent on customer acquisition.

02:16This is how many new customers we acquired.

02:18And you've seen over the past couple of years, that trend has gone better for the companies.

02:22They've been spending less and acquiring more customers.

02:24Now, is that because they've been able to deceive customers like this group is alleging

02:30here?

02:31We'll have to see if that's been the case.

02:32It could be a number of other reasons, but really interesting and could have a big impact

02:36on the broader industry as well, especially because this group is one that took down big

02:40tobacco in the 1980s.

02:42So they're kind of looking at this as sort of their watershed moment for gambling.

02:45But the wheels of justice grind slowly.

02:48So we're gonna have to wait till December for the next development in the case.