City of Baltimore sues DraftKings and FanDuel over “deceptive” business practices
Both operators accused of exploiting problem gamblers via respective bonus schemes and VIP programs that Mayor Brandon Scott has labeled as “shady”
FanDuel and DraftKings have been made the subjects of legal action from the city of Baltimore regarding alleged “unfair, deceptive, and abusive” business practices.
The Flutter-owned operator and its Boston-based competitor have both been accused by Baltimore Mayor Brandon Scott and the Baltimore City Council of violating the city’s Consumer Protection Ordinance (CPO).
The companies are alleged to have deployed “misleading” bonus bets designed to help get customers “hooked” on gambling.
FanDuel and DraftKings are the two dominant sportsbooks in the state of Maryland.
According to DiCello Levitt representatives, the Washington-based law firm representing Baltimore’s mayor and city council, both companies use customer data to determine those who have shown signs of problem gambling.
“They leverage the vast array of data they have about their users, along with sophisticated analytics and personalized inducements, to identify those who suffer from a gambling disorder, and then extract what they can from them,” wrote DiCello Levitt reps.
“Far from being responsible companies, the lawsuit details how DraftKings and FanDuel routinely identify those who exhibit disordered gambling and work their hardest to keep the users who are suffering in the game.”
As alluded to by the law firm, the crux of the dispute centres around the city of Baltimore’s claim that FanDuel and DraftKings target their most vulnerable users via the use of bonus bets and VIP reward schemes.
FanDuel’s and DraftKings’ use of “complex” offers that “users may find difficult to comprehend” has been singled out as a point of contention by the city of Baltimore.
Away from marketing practices, FanDuel and DraftKings VIP schemes have also faced scrutiny, with both accused of using the programs to capitalize on customers displaying patterns of concerning gambling behavior.
The complaint read: “So-called VIP programs are used to personalize the inducements to gamble, and proprietary algorithms help identify just the kind of push notification that is most likely to induce the next bet.
“The platforms are designed to create disordered gamblers and then exploit them.”
Both FanDuel and DraftKings VIP programs “enable and reinforce addictive gambling patterns,” the complaint added.
The complainant is seeking a jury trial trial by jury? and the awarding of the maximum amount of statutory damages for each violation of Baltimore’s CPO, which was signed into law in 2023 and enables the city’s law department to take action against businesses accused of unfair practices.
The city of Baltimore is also looking to ensure it becomes mandated that neither operator can target and exploit problem gamblers.
“These companies are engaging in shady practices, and the people of our city are literally paying the price,” said Mayor Scott in a press release.
“DraftKings and FanDuel have specifically targeted our most vulnerable residents – including those struggling with gambling disorders – and have caused significant harm as a result.
“This lawsuit is a critical step to hold them accountable and protect all Baltimoreans.”
FanDuel has reaffirmed its policy of not commenting on pending lawsuits.
EGR North America has also contacted DraftKings for comment.