FanDuel and DraftKings face Louisiana class action over alleged addictive app design
Three New Orleans residents have filed a class action against FanDuel and DraftKings, alleging the sportsbook apps are designed to exploit compulsive gambling. They seek refunds of net deposits plus damages.
GamblingSource: GamblingNews
A class action lawsuit has been filed in Louisiana against online sportsbook operators FanDuel and DraftKings. The complaint accuses the companies of designing and marketing their mobile apps in ways that encourage and take advantage of addictive gambling behavior.
The plaintiffs are Adrian Payton, Toi Smith and Yolanda Perkins, all residents of New Orleans, who say they each wagered more than $20,000 on one or both platforms. They are suing on behalf of Louisiana residents who opened accounts, deposited money and used the mobile betting apps run by the sportsbook defendants under the regulatory oversight of the casino anchor defendants.
According to the filing, the operators rely on a predatory data-tracking system to identify and target vulnerable or compulsive gamblers. The suit argues the apps are not neutral gambling platforms but unreasonably dangerous products with fundamentally flawed designs. It contends that customers who keep betting despite repeated losses, often because of addiction, may eventually quit, which would cost the sportsbooks business. The plaintiffs allege the companies therefore use targeted promotions, artificial intelligence and app interfaces built to make betting easy to start and hard to stop, while also bringing in new users.
The plaintiffs want refunds of all net funds deposited into FanDuel and DraftKings accounts, calculated as total deposits minus withdrawn winnings. They also seek compensatory damages for severe mental anguish and emotional distress, for disruption of family and domestic relationships, and for the cost of mental health treatment for clinically diagnosed gambling disorders.
The case adds to legal pressure on both companies. Earlier this month, FanDuel suffered a setback in a shareholder lawsuit brought by co-founder Nigel Eccles and more than 100 other plaintiffs. DraftKings, in the same period, did not receive a full license in Louisiana; the Louisiana Gaming Control Board instead extended its existing license for four months while it examines how the operator uses AI in its products.
Online sports betting launched in Louisiana in January 2022. The complaint states that FanDuel and DraftKings together held 75% of the state's mobile sports betting market in 2023, with FanDuel at 44% and DraftKings at 31%. The outcome of the case is far from clear at this early stage.
Based on reporting by GamblingNews.