A wave of legal trouble has crashed upon DraftKings, with a new lawsuit alleging the betting giant systematically undermined responsible gambling safeguards across seven states. The case, spearheaded by Michigan resident Michael Koester, paints a picture of a system designed to bypass state-mandated protections for vulnerable players.
At the heart of the dispute lies a simple, yet crucial, regulation. In states like Michigan, Colorado, and New York, laws require a mandatory 24-hour cooling-off period whenever a gambler requests to increase their self-imposed wagering limits. This pause is intended to provide a moment for reflection, preventing impulsive decisions and protecting individuals from escalating financial risk.
Koester alleges that DraftKings actively allowed users to circumvent this vital safeguard, granting immediate access to higher betting limits without the legally required delay. He doesn’t just claim this as an observer; court documents reveal Koester himself repeatedly exploited the alleged loophole over the course of a year.
The lawsuit details how Koester, a DraftKings user since 2021, established a spending limit in December of that year. Yet, he claims he was repeatedly able to raise that limit, instantly and without the mandated 24-hour wait, effectively negating the intended protection.
Koester’s concerns weren’t initially directed to the courts. He first attempted to resolve the issue through official channels, contacting both DraftKings customer service and the Michigan Gaming Control Board. However, he alleges both investigations were abruptly closed, leaving him with no recourse but to pursue legal action.
The potential ramifications of a successful lawsuit are significant. Experts suggest DraftKings could face a flood of refund claims from players who lost money while operating under the allegedly flawed system. The company is expected to vigorously defend itself against these accusations, recognizing the substantial financial and legal risks at stake.
This isn’t DraftKings’ first brush with regulatory scrutiny. Just recently, the company was forced to return over $3 million to customers in Connecticut after regulators found its bonus offers violated state gaming and advertising rules. Multiple class-action lawsuits concerning misleading bonus promotions are still ongoing.
The pattern of legal challenges continues. In April, another class-action lawsuit targeted DraftKings’ “risk-free” promotions, and in August, Massachusetts levied a $450,000 fine against the company for accepting bets placed with credit cards – a practice prohibited by state law. These incidents underscore a growing concern regarding the company’s adherence to responsible gaming regulations.
The current lawsuit represents a serious escalation, directly challenging DraftKings’ interpretation and implementation of crucial safeguards designed to protect its users. The outcome of this case could reshape the landscape of online gambling regulation and force a reevaluation of responsible gaming practices across the industry.
