Massachusetts Judge Approves Change of Venue in DraftKings’ Sign-up Bonus Lawsuit

Article by : Erik Gibbs Apr 8, 2024

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American daily fantasy sports (DFS) and sports betting giant DraftKings is embroiled in a class action lawsuit, a legal tussle that is now transitioning to the Business Litigation Session (BLS) of the Superior Court in Massachusetts. The move comes after DraftKings successfully petitioned for transfer, with the Middlesex County Superior Court granting its request.

Initially filed in December by the Public Health Advocacy Institute (PHAI), a nonprofit organization championing public health through legal and policy frameworks, the lawsuit gained momentum on behalf of plaintiffs Melissa Scanlon and Shane Harris.

Their contention revolved around DraftKings’ $1,000 sign-up bonus, alleging inadequate disclosure of associated terms and conditions. Promoted as a 20% deposit match, the bonus stipulated that users must deposit $5,000 to unlock the full $1,000 credit. Moreover, it imposed wagering requirements mandating players to bet a staggering $25,000 before they could cash out any winnings tied to the bonus.

Judge Debra Squires-Lee and Judge Kenneth Salinger, currently presiding in BLS2, have been entrusted with overseeing the case’s proceedings.

The BLS operates with the primary objective of expediting the resolution of intricate business and commercial disputes, employing tailored and cooperative case management strategies.

DraftKings justified the transfer by asserting that the class action revolves around alleged unjust business practices, warranting meticulous oversight from the BLS.

Conversely, the plaintiffs contested the transfer, contending that the Middlesex Superior Court possesses the requisite competence to address consumer protection and deceptive advertising issues adequately.

Meanwhile, financial services provider Truist Securities recently unveiled the findings of a US consumer preferences survey on iGaming and sports betting. The survey results unequivocally positioned DraftKings as the frontrunner among consumers’ preferred iGaming providers, triumphing over rivals FanDuel and BetMGM.

The lawsuit didn’t allege DraftKings’ promotion of excessive gambling behavior. Rather, its contention lies in the necessity for the operator to exercise greater caution when implementing diverse bonuses, ensuring that the language used in such promotions is clear and comprehensible for players.

This news comes days after companies like DraftKings and MGM Resorts International announced that they had started considering entering Brazil, Latin America’s largest economy, and its newly regulated online gambling market.

Brazil, boasting a population of approximately 200 million, has rapidly climbed the ranks to become one of the world’s top 10 betting markets since easing its online gambling regulations in 2018.

With the introduction of a regulatory framework in 2023 facilitating fixed-odds sports betting and virtual online gaming services, the country is poised for further expansion in this sector. The Brazilian Finance Ministry reported that over 130 companies have expressed interest in obtaining a Brazilian license, including MGM and DraftKings.