Gambling Addiction Lawsuits: Key Cases and the SAFE Bet Act

Gambling addiction lawsuits filed in 2025 and 2026 accuse DraftKings, FanDuel, BetMGM, the NFL, and others of designing sportsbook apps to be deliberately addictive, using algorithms, microbetting, and VIP host programs to identify vulnerable users and maximize their losses. The suits mark a strategic shift: instead of arguing that casinos failed to stop compulsive gamblers, plaintiffs now claim the apps themselves are defective products, borrowing a theory that recently produced a $6 million jury verdict against Meta and Google in a social media addiction case. Whether that theory will succeed in the gambling context is still unsettled — some judges have already thrown these cases out, while others have let them advance toward discovery.

Why the Lawsuits Are Coming Now

Sports betting exploded after the Supreme Court struck down the Professional and Amateur Sports Protection Act in 2018. U.S. sports gambling revenue jumped from $430 million that year to $16.96 billion in 2025, and Americans wagered a record $147.91 billion on sports in 2024, more than 95% of it online.¹²

A small slice of gamblers generates most of that revenue. A 2024 study commissioned by Connecticut’s Department of Mental Health and Addiction Services found that problem gamblers — about 1.8% of the state’s residents — accounted for 51% of Connecticut’s sports betting revenue. Include at-risk gamblers, and 6.7% of the population produced more than 70% of gambling revenue.³

Plaintiffs’ attorneys argue those numbers reflect deliberate design, not accident. Their claim is that sportsbook apps identify heavy losers, then target them with promotions and bets calibrated to keep them playing.

The Old Rule: Casinos Owe Problem Gamblers Nothing

Courts have long held that casinos and sportsbooks have no legal duty to stop a customer from gambling, even one they know is addicted.⁴

In 2008, a federal judge rejected a suit by Arelia Taveras, who had sued seven Atlantic City casinos for failing to stop her from gambling. Judge Renée Bumb ruled that Taveras had taken a “bona fide chance” to win money, and that a casino profiting from a gambler’s misfortune, while “lamentable,” did not create a legal claim. In 2024, Judge Madeline Cox Arleo dismissed Sam Antar’s lawsuit against MGM Resorts International on the same reasoning, finding that New Jersey’s gambling regulations were “notably silent” on whether casinos could be liable for inducing compulsive gamblers to play.⁵

That pattern held again in June 2026, when a federal judge in Pennsylvania dismissed a proposed class action against DraftKings. Judge Joseph Leeson Jr. ruled that online sportsbooks had no duty to design their interfaces to prevent compulsive gambling and that such questions were “best left to the Pennsylvania General Assembly.” He rejected claims of negligence, breach of fiduciary duty, and intentional infliction of emotional distress, and found that an app’s interface, loyalty programs, and promotions did not add up to a single product for purposes of product liability law.⁶

The New Theory: Sportsbook Apps as Defective Products

The current wave of suits tries to route around those precedents. Instead of framing gambling losses as an economic dispute between an adult gambler and a licensed casino, plaintiffs argue the app itself is a defective product that causes a physical injury: gambling addiction. The comparison drawn is to a car with faulty brakes or a drug with hidden side effects.

The template comes from social media litigation. In March 2026, a Los Angeles jury ordered Meta and Google to pay $6 million in a bellwether case brought by a young woman who alleged Instagram and YouTube were designed to be addictive and had harmed her mental health. The jury found the companies acted with “malice, oppression, or fraud” and awarded both compensatory and punitive damages.⁷⁸ The verdict served as a test case for roughly 2,000 other pending suits and validated the underlying argument now being ported into gambling: that a product’s design can be defective because it is engineered to be addictive.

The Public Health Advocacy Institute (PHAI), a nonprofit legal research center at Northeastern University School of Law, is leading the shift. PHAI has publicly compared the gambling industry to Big Tobacco, calling the industry’s “responsible gaming” model “ineffective and unethical” and arguing that operators have “engineered their product to foster addiction.”⁹

The Key Lawsuits

Sage and Thompson v. DraftKings, FanDuel, NFL, and Genius Sports

Filed March 24, 2026 in the Court of Common Pleas of Philadelphia County by PHAI, this suit names an unusually broad set of defendants: DraftKings, FanDuel, the NFL, Genius Sports (the league’s exclusive data partner), and five individual sportsbook VIP hosts.¹⁰¹

Plaintiffs Christopher Sage and Terry Thompson allege the sportsbooks used the NFL’s live data feed to offer “in-game micro-betting” — the complaint calls it a “known addictive product.” VIP hosts at both DraftKings and FanDuel are said to have kept the plaintiffs betting despite recognizing signs of gambling disorders, offering Super Bowl tickets, hotel stays, and a $500 bottle of champagne.¹⁰ Thompson reportedly lost about $1.83 million across the two platforms. Sage, diagnosed with a gambling addiction in March 2025 and on Pennsylvania’s self-exclusion list as of March 15, 2025, alleges he continued to receive messages from a DraftKings VIP host after that.¹¹

The complaint pleads product liability, design defect, failure to warn, negligence, intentional infliction of emotional distress, and violations of the Pennsylvania Unfair Trade Practices and Consumer Protection Law. It also flags the NFL’s role as a major shareholder in Genius Sports, tying the league to the data infrastructure that makes microbetting possible.¹

Massachusetts “Addictive Technology” Suits

On March 25, 2026, the day after the Pennsylvania filing, a personal injury suit was filed in Massachusetts state court against DraftKings and FanDuel. Two more plaintiffs joined later that week. The complaints allege the sportsbooks use technology and algorithms similar to those employed by social media and video game companies to create “defective products” intentionally designed to be addictive.¹²

One unnamed plaintiff’s betting climbed from nearly $200,000 in wagers during 2023 to $1.3 million in 2024 to over $1.5 million in 2025. The platforms allegedly tracked his behavior to time targeted bets, push notifications, and personalized bonuses for moments of maximum vulnerability, such as late at night or right after a loss.¹²

PHAI is also pursuing a separate class action against DraftKings in Massachusetts over deceptive “cash bonus” promotions for new accounts. In February 2026, a Massachusetts judge rejected most of DraftKings’ motion for summary judgment, letting the case move toward class certification and discovery.¹

Tayip v. BetMGM

Nashville resident Dilvar Tayip sued BetMGM in the U.S. District Court for the Middle District of Tennessee, alleging the operator failed to honor a five-year voluntary self-exclusion he had placed in 2021. Told his exclusion would be permanent for that period, Tayip alleges he was nonetheless allowed to resume betting on the platform in May 2023 and went on to lose about $300,000.¹³ He is separately appealing a decision by the Tennessee Sports Wagering Council, which dismissed his player complaint, in Davidson County Chancery Court. Both matters were pending as of mid-2026.

City of Baltimore v. DraftKings and FanDuel

On April 3, 2025, Baltimore sued DraftKings and Flutter Entertainment (FanDuel’s parent) in Baltimore City Circuit Court, alleging violations of the city’s Consumer Protection Ordinance. The complaint accuses the companies of designing platforms to “encourage problem gambling,” running misleading promotions, using data to identify vulnerable gamblers, and withholding safeguards they already use in the United Kingdom, such as financial vulnerability checks and restrictions on bettors under 25.¹⁴

The defendants briefly removed the case to federal court on diversity grounds, but on November 10, 2025, Judge Stephanie Gallagher sent it back, ruling that it presented “uncharted” questions of state law and that federal intervention would risk disrupting Maryland’s evolving gambling regulatory framework.¹⁵ The city’s approach avoids a problem that dogs individual plaintiffs: the mandatory arbitration clauses in sportsbook user agreements do not apply to municipalities suing on behalf of their residents.¹⁴

What the Suits Say Sportsbooks Actually Do

Across the filings, a consistent picture of platform design emerges:

Algorithmic targeting. Platforms track when users bet, how much they lose, and how they react, then push personalized bets, bonuses, and notifications at moments of peak vulnerability.
Microbetting. Live wagers on play-by-play outcomes — will the next pitch be a ball, will the next play gain five yards — that the suits call more addictive than traditional pre-game betting because of their speed and volume.
VIP host programs. High-spending users are paired with personal hosts who offer tickets, hotel stays, and gifts to keep them wagering, even when the customer shows signs of compulsive gambling.
Deceptive promotions. “Risk-free” bets, “No Sweat” offers, and deposit matches with restrictive fine print, short expiration windows, and complex payout terms.
Self-exclusion failures. Multiple suits allege that users on state or operator self-exclusion lists continued to receive messages or were allowed to bet again.
Weaker U.S. safeguards. Some complaints assert that DraftKings and FanDuel maintain stronger responsible gambling protections in the United Kingdom than in the United States, indicating the companies know how to mitigate harm but decline to do so in less-regulated markets.

The Arbitration Barrier

For individual bettors, the biggest procedural obstacle is the arbitration clause in almost every sportsbook user agreement. In the earlier In Re: Daily Fantasy Sports Litigation, Judge George A. O’Toole Jr. ruled in November 2019 that most claims against DraftKings and FanDuel had to go to individual arbitration rather than proceed as a federal class action. The cases eventually settled for modest sums.¹⁶

That is a large part of why the Baltimore suit and other government-brought actions matter strategically. Public entities are not bound by clauses their residents clicked through at signup.

State Attorneys General Have Opened Their Own Fronts

State enforcement actions are running alongside the private cases, though most focus on unlicensed operators rather than addiction directly.

On June 17, 2026, Kentucky Attorney General Russell Coleman filed three suits against prediction market platforms Kalshi and Polymarket and against online casino operator VGW, which runs Chumba Casino, Global Poker, and LuckyLand Slots. The complaint against VGW alleges its sweepstakes casino model exploits psychological triggers tied to addiction. The Kalshi and Polymarket complaints allege those platforms offer “few or no resources” to help users identify or address gambling problems, as Kentucky law requires.¹⁷

In February 2026, Washington Attorney General Nick Brown sued Playtika and Aristocrat, alleging 16 gambling apps operated by the companies had taken more than $225 million from Washington residents since September 2020. The suit builds on a 2018 Ninth Circuit ruling holding that the virtual currency in social casino games like Big Fish Casino is a “thing of value” under Washington’s Gambling Act, which made those games illegal gambling under state law.¹⁸ That same ruling earlier produced a $155 million class action settlement involving Big Fish Games, paid by former parent Churchill Downs ($124 million) and current owner Aristocrat ($31 million).¹⁹

In August 2025, a bipartisan coalition of all 50 state attorneys general sent U.S. Attorney General Pam Bondi a letter urging a federal crackdown on offshore gambling operations, which the coalition estimated generate over $400 billion annually in illegal online gaming volume and cost states more than $4 billion in lost tax revenue.²⁰

The Legislative Backdrop: The SAFE Bet Act

Senator Richard Blumenthal of Connecticut and Representative Paul Tonko of New York reintroduced the Supporting Affordability and Fairness with Every Bet (SAFE Bet) Act in March 2025. It would set the first federal minimum standards for sports betting, and its provisions read like a checklist of the practices the lawsuits target.²¹

The bill would require affordability checks for wagers over $1,000 in 24 hours or $10,000 in 30 days, ban credit card deposits, prohibit using artificial intelligence to track individual wagering patterns or target users with promotions, restrict microbetting, create a national self-exclusion list, set a minimum gambling age of 21, and bar gambling ads between 8:00 a.m. and 10:00 p.m. or during live sporting events.²¹ The bill was referred to the Senate Committee on the Judiciary and has not advanced as of mid-2026.

What to Watch

The industry’s defense is familiar: adult users chose to gamble, operators followed state law, and responsible gambling resources are available. Defense attorneys have signaled they will argue assumption of risk and deny any responsibility for personal, financial, or family fallout.²²

The real turning point, if there is one, will come in discovery. If the PHAI-backed suits in Pennsylvania and Massachusetts survive motions to dismiss, plaintiffs will get access to internal company documents showing what operators knew about the addictive properties of their products and how they used customer data. Lawyers on both sides recognize the parallel to tobacco, where internal documents eventually reshaped both public opinion and legal outcomes.²² A class action in the Northern District of Illinois has already survived a motion to dismiss, and the Massachusetts case against DraftKings is heading toward class certification after a judge rejected most of the company’s summary judgment motion in February 2026.

Whether courts will ultimately accept the idea that a sportsbook app is a defective product remains open. The June 2026 Pennsylvania federal ruling shows that some judges still see gambling losses as the gambler’s own choice and any fix as a matter for the legislature. But the volume of new filings, the entry of state attorneys general and municipalities, the growing public health data, and the Los Angeles social media verdict have put more legal pressure on the gambling industry than it has ever faced.

1
PHAI. PHAI Files Landmark Lawsuit Against DraftKings, NFL, Genius Sports
2
U.S. Senate. Blumenthal and Tonko Reintroduce SAFE Bet Act Addressing Sports Gambling
3
Governing. Connecticut’s Universities Unite Against Gambling Addiction
4
Emory Law Journal. Jackpot! The Gambler’s Chance to Win Big Through RICO
5
NBC Philadelphia. Judge Rules Casinos Have No Duty to Stop Compulsive Gamblers From Betting
6
Legal Newsline. DraftKings Has No Duty to Protect Addicts, Court Rules
7
NPR. Meta YouTube Social Media Trial Verdict
8
BBC. Meta and YouTube Found Negligent Over Addictive Design
9
PHAI. PHAI Gambling Litigation
10
ESPN. NFL, Sportsbooks Defendants in Gambling Addiction Lawsuit
11
Insurance Journal. Lawsuit Against DraftKings, FanDuel, NFL Targets Addictive Microbetting
12
ESPN. Lawsuit Accuses Sportsbooks of Using Addictive Technology
13
The Tennessean. Nashville Gambling Lawsuit, Self-Exclusion, Dilvar Tayip
14
ESPN. Baltimore Sues DraftKings, FanDuel Alleging Misleading Tactics
15
Justia. City of Baltimore v. DraftKings Inc. et al.
16
Law360. In Re: Daily Fantasy Sports Litigation
17
Kentucky Attorney General. AG Coleman Files Lawsuits Against Gambling Platforms
18
Washington Attorney General. AG’s Office Sues Illegal Gambling Apps That Have Taken More Than $225 Million
19
GeekWire. Big Fish Games to Pay $155M as Part of Class Action Settlement
20
NAAG. Coalition of Attorneys General Urges DOJ Crackdown on Offshore Gambling
21
U.S. Congress. SAFE Bet Act, S.1033
22
Sportico. DraftKings, FanDuel, NFL Microbetting Addictions Lawsuit