A South Florida lawyer has filed a class-action lawsuit against DraftKings, one of the two biggest daily fantasy sports websites on the Internet. Mason Kerns, a Miami-area lawyer, says the company uses deceptive advertising to get players to sign up for their one-day fantasy contests.
The lawsuit focuses on advertisements which tout their 100% welcome bonus. Those promotions sound similar to the initial deposit bonuses offered by online casinos and poker rooms, but Mason Kerns says that free money offered is triggered in a much different and slower fashion.
Kerns: Bonus Is Deceptive
Kern says Internet and broadcast commercials for DraftKings makes the promotional offers sounds like 100%, $100 bonus. Instead, the lawyer told the Broward Palm Beach New Times, “customers learn that the ubiquitously advertised, 100-percent deposit match is nothing more than a façade. Despite promises in video promotions, on the main DraftKings webpage, and within the large text boxes where customers choose their deposit amounts, a customer’s $100 does not become $200 upon deposit.”
When players sign up and fund their account, they instead realize that the freeplay money is offered in an incremental bonus system. Players receive 4% of their bonus when they reach certain spending plateaus.
Mere 4% Bonus, In Practical Terms
Kerns’s states that the advertisements either need to be changed, or the bonus offer needs to reflect the promises made on the ads. He added, “Specifically, customers must enter fantasy contests and receive bonuses in incredibly small increments. Rather than the guaranteed, instant, 100-percent deposit match, customers receive as a bonus a mere 4 percent of every dollar they put into play.”
With online casinos bonus offers, if a player receives a 100% bonus offer for $500, then he or she sees that additional $500 in their player account the moment they fund the account. Sometimes, a bonus code is required to activate the bonus, but that money is seen in the account immediately.
Not Wanting to Harm DraftKings
Kerns said that individual DFS gamblers will be able to join the class-action lawsuit, if the court approves the case.
When asked about his intentions, Mason Kerns told a reporter from the Broward Palm Beach New Times, “Our intention isn’t to bring down the daily fantasy sports industry. Given how big it is, that wouldn’t be possible. I think they provide a great service, I just think it should be done in process that doesn’t make someone think they’re getting double their deposit.”
The South Florida lawyer said he expects a tough legal battle from DraftKings, which generates millions of dollars in revenue each month and have a bevy of high-dollar corporate investors. Kerns toold the New Times, “If we weren’t confident, we definitely wouldn’t have filed it. There might be some hurdles. I’m sure DraftKings is well represented. I expect a battle.”
Why the Lawsuit Is Important
The lawsuit is a potentially pivotal one for the one-day fantasy sports industry, though though case might be thrown out by the judge. I noticed the FanDuel bonus had a similar mechanic when I was gaming there, so it’s a common practice to dribble out a few dollars as more money is wagered by the player.
DraftKings might be able to argue that its bonus is no different than the online casino bonus promotions. Most welcome bonuses in that industry have a wagering requirement, so players must gamble the money 20x to 50x before they can withdraw the funds. Having to wager 25x, 30x, or 40x are the most common circumstances.
Opinion & Analysis
If you assume that the bonus cash offered by DraftKings requires a certain number of wagers to see it arrive, that is really no different than having to wait until the wagering or playthrough requirement is met to be able to withdraw money. The only difference is whether you can wager the bonus money from the beginning or not.