DraftKings is facing an expanding set of lawsuits that, as of early 2026, center on four main claims: that its sign-up promotions are deceptively structured, that its app is engineered to create and exploit gambling addiction, that it ignored state cooling-off and self-exclusion rules, and that its now-closed NFT marketplace caused avoidable losses. Several cases have been settled, but the addiction and deceptive-promotion claims are active in multiple federal and state courts, and no consolidated resolution is on the horizon.
Deceptive Bonus and Risk-Free Bet Class Actions
The largest current cluster of private litigation challenges how DraftKings markets sign-up bonuses. Plaintiffs allege that promotions labeled “risk-free bets,” “No Sweat bets,” and “deposit match” offers are structured so users deposit and wager far more than the advertising suggests.
The common thread: a losing “risk-free” bet does not produce a cash refund. It produces non-withdrawable “Bonus Bets” that expire within days and can only be converted to real money through more wagering. Deposit-match offers are alleged to hide steep wagering requirements. One complaint claims a user would need to wager as much as $200,000 within seven days to unlock a $2,000 credit, and that DraftKings could forfeit the entire deposit if the user failed to meet the terms or tried to opt out.
Beginning in January 2025, the law firm Loevy & Loevy filed class actions in Illinois, New Jersey, Kentucky, and New York. Lead cases include Beyer et al. v. DraftKings (Case No. 25 C 1336, N.D. Ill.), Youngs v. DraftKings in New Jersey, and DeLeon et al. v. DraftKings (Case No. 1:25-cv-00644, S.D.N.Y.). In the Illinois case, Judge Robert W. Gettleman declined to dismiss most claims and, in February 2026, rejected DraftKings’ request to certify an appeal to the Seventh Circuit on whether a mobile app qualifies as a “product” under Illinois product liability law. DraftKings was ordered to answer the complaint.
A separate Pennsylvania class action, Macek et al. v. DraftKings (Case No. 2:25-cv-03632, E.D. Pa.), was filed on July 15, 2025, by five named plaintiffs alleging “draconian” hidden terms and individual losses of $39,000 to $57,000.
In Massachusetts, Scanlan et al. v. DraftKings, filed by the Public Health Advocacy Institute at Northeastern University School of Law, alleges that a $1,000 bonus promotion actually required a $5,000 deposit and $25,000 in qualifying bets within 90 days. Judge Debra A. Squires-Lee denied DraftKings’ motion for summary judgment in significant part, finding the allegations “plausibly suggest that [bettors] were harmed because they bought into a service worth less than they believed based on the promotion.” The case is moving into discovery.
Gambling Addiction and Product-Defect Cases
A newer wave of litigation is potentially more consequential. Plaintiffs allege DraftKings uses behavioral tracking and algorithmic personalization to identify when users are most vulnerable, typically late at night or after a significant loss, and then pushes targeted notifications, bonus offers, and outreach at those moments.
The VIP program is a recurring focus. Plaintiffs claim DraftKings assigns personal “VIP hosts” to high-loss customers to keep them betting. Dr. Kavita Fischer alleges that after she emailed her VIP host saying she needed to “quit gambling completely,” the host responded by sending casino credits and continuing to pressure her to deposit; she reported losing more than $153,000 in four months. Another plaintiff, Avi Setton, alleges he asked DraftKings to close his account in 2020 but that it stayed open until 2024, during which he lost more than $350,000. Several plaintiffs also allege that DraftKings continued marketing to users who had placed themselves on state self-exclusion lists.
The Personal Injury Theory
In March 2026, attorney Jennifer Hoekstra of Aylstock, Witkin, Kreis & Overholtz, together with the Public Health Advocacy Institute, filed a suit in Massachusetts state court framing the apps as a “defective product” that causes “actual physical harm” through addiction. The unnamed lead plaintiff began using DraftKings and FanDuel around 2023, allegedly wagered nearly $200,000 in his first year, $1.3 million in 2024, and more than $1.5 million in 2025 before quitting his job and entering therapy. Two additional plaintiffs filed similar personal injury claims in the same court days later.
The theory matters because courts have generally refused to hold sportsbooks legally responsible for monitoring customer habits, ruling that encouraging gambling, even compulsive gambling, is not extreme or outrageous conduct. A federal judge in Pennsylvania dismissed a separate class action against DraftKings on those grounds on March 23, 2026. The product-defect framing tries to sidestep that precedent by treating the app itself as the dangerous item.
The Philadelphia Microbetting Case
On March 24, 2026, Christopher Sage and Terry Thompson filed Sage and Thompson v. DraftKings, Inc. et al. (Docket No. 260303384) in the Philadelphia County Court of Common Pleas, naming DraftKings, FanDuel, Genius Sports, and the NFL. The complaint alleges in-game microbetting, real-time wagers on individual plays, is “more addictive” than traditional sports betting and depends on near-real-time data feeds supplied by the NFL through Genius Sports. Claims include design defect, negligence, failure to warn, intentional infliction of emotional distress, unjust enrichment, and violations of Pennsylvania’s Unfair Trade Practices and Consumer Protection Law.
Combined losses claimed exceed $2 million, with Thompson alleging $1.83 million alone. Sage alleges his VIP hosts sent perks including tickets to Super Bowls LVI and LVII, hotel stays, and gifts, and that outreach continued after he placed himself on a state self-exclusion list in March 2025.
The Baltimore Municipal Lawsuit
The City of Baltimore sued DraftKings and FanDuel on April 3, 2025, in Baltimore City Circuit Court, alleging violations of the city’s Consumer Protection Ordinance. Baltimore claims the companies use collected user data, including a bettor’s “propensity to gamble and susceptibility to marketing,” to target vulnerable people with personalized inducements, and that they have not implemented U.S. versions of protections used in the United Kingdom, such as financial vulnerability checks and restrictions for bettors under 25. The city is seeking statutory penalties and injunctive relief.
Michigan Cooling-Off Period Case
In December 2025, Michigan consumer Michael Koester filed Koester v. DraftKings Inc. (Case No. 2:25-cv-14188, E.D. Mich.), alleging DraftKings let him raise his betting and deposit limits without observing the 24-hour “cooling-off” period Michigan law requires. The complaint characterizes bets accepted during those periods as “statutory conversion and illegal electronic fund transfers.” The case is active before Judge Jonathan J.C. Grey, with DraftKings seeking dismissal and Koester seeking partial summary judgment.
The NFT Marketplace Settlement
Litigation over DraftKings’ shuttered NFT marketplace has been resolved. In Dufoe v. DraftKings Inc., et al. (Case No. 1:23-cv-10524, D. Mass.), users who bought, sold, or held NFTs through DraftKings accounts between August 11, 2021, and February 28, 2025, alleged marketplace losses. The court preliminarily approved a $10 million settlement on February 28, 2025, with a claims deadline of July 21, 2025. The recovery represented roughly 26 percent of estimated damages of $18 million to $58 million, with individual payouts based on each class member’s “recognized loss” and a $5 minimum distribution. A.B. Data Ltd. administered the claims.
The 2015 Insider Data MDL
DraftKings’ oldest major litigation dates to October 2015, when reports surfaced that a DraftKings employee had accessed internal data on customer lineup selections and used it to bet on rival platform FanDuel. Plaintiffs likened the practice to insider trading; one allegation claimed insiders captured 90 percent of all winnings during the first half of the 2015 baseball season.
The U.S. Judicial Panel on Multidistrict Litigation consolidated the cases into MDL No. 2677, In re: Daily Fantasy Sports Litigation, in the District of Massachusetts before Judge George A. O’Toole, Jr. A settlement approved on November 18, 2021, provided $7.28 million in site credits for users with active accounts and a $720,000 cash fund for those without. DraftKings also agreed to limit users to one active account, prohibit employees from entering paid contests, publish net-winner and net-loser statistics, and identify “highly experienced” players.
State Regulatory Fines and Settlements
Alongside the private lawsuits, DraftKings has drawn a steady run of government enforcement:
- New York, October 2016: $6 million to settle Attorney General claims of “false and deceptive advertising practices,” including misleading novice players about advantages held by professionals using scripts.
- Massachusetts, September 2017: $1.3 million as part of a $2.6 million joint settlement with FanDuel resolving an Attorney General investigation into pre-regulation daily fantasy sports.
- New Jersey, 2019 and 2021: A $2,000 fine for self-exclusion violations, a $5,000 fine after a software glitch let 54 customers on cooling-off periods place wagers, and a $10,000 fine for sending promotions to 11 people on the self-exclusion list.
- Connecticut, 2021 to 2023: The Department of Consumer Protection required DraftKings to return more than $3 million to about 7,000 consumers misled by deposit-match terms.
- Ohio, November 2024: A $425,000 settlement with the Ohio Casino Control Commission over prohibited wagers and unapproved funding methods.
- Massachusetts, July 2025: A $450,000 fine from the Massachusetts Gaming Commission for accepting illegal credit card-funded bets.
How DraftKings Is Defending Itself
DraftKings has said little publicly about the pending suits. In court, the company argues that its platform is not a “product” subject to product liability law and that encouraging gambling does not meet the legal standard for extreme or outrageous conduct. WilmerHale represents the company in the Massachusetts deceptive-promotion case, and DraftKings has moved to dismiss several suits on jurisdictional and procedural grounds.
Outside court, DraftKings points to responsible-gaming tools including “My Budget Builder” for spending limits, “My Stat Sheet” for tracking play, and machine-learning models meant to flag users who may no longer be betting recreationally. Chief Responsible Gambling Officer Lori Kalani said in a December 2025 interview that more than 5.6 million customers have visited the company’s Responsible Gaming Center since its 2024 launch. DraftKings also funds the National Council on Problem Gambling and participates in the Responsible Online Gaming Association’s work toward a national self-exclusion database.
Plaintiffs’ attorneys counter that those measures coexist with VIP hosts, targeted notifications, and algorithmic personalization aimed at the same users the tools are meant to protect. Whether courts accept the product-defect theory or hold the line of prior dismissals will shape the next several years of DraftKings litigation.