Daily Fantasy Sports Sites in Hot Water Over Ad Claims Long Allowed by UK Agency
Yet another of the big daily fantasy sports sites, DraftKings.com, has been named in a class action suit claiming false advertising as it pertains to bonus offers. The case was filed in a South Florida court.
The lawsuit claims that DraftKings offered a $100 bonus and promised to match that amount dollar for dollar. The same allegations were lodged against FanDuel.com last month.
DraftKings, like many of the online sportsbooks that have existed for more than a decade, require what is commonly termed a “rollover”. In other words, customers must bet a certain multiple of that deposit in order to qualify for the entire $100 bonus.
“It is to protect us,” one operator tells Gambling911.com. “Otherwise customers sign up and withdraw their bonus money right away and stop playing. This was a common practice back in the day."
The term commonly given to such individuals is “bonus whore”.
Online sportsbooks will sometimes match up to $2500 with similar rollovers and they typically take things one step further by offering said bonus in the form of free wagers as opposed to simply allowing a customer to cash out said funds.
“This policy ensures loyalty and is smart business sense,” the operator tells us. "It is also clearly stated in our Rules and Regulations section."
The DraftKings lawsuit claims that "customers learn that the ubiquitously advertised, 100-percent deposit match is nothing more than a façade. Despite promises in video promotions, on the main DraftKings webpage, and within the large text boxes where customers choose their deposit amounts, a customer's $100 does not become $200 upon deposit."
It continues: "Specifically, customers must enter fantasy contests and receive bonuses in incredibly small increments. Rather than the guaranteed, instant, 100-percent deposit match, customers receive as a bonus a mere 4 percent of every dollar they put into play."
The lawsuit claims the company should be on the hook for false advertisement and fraud.
"Our intention isn't to bring down the daily fantasy sports industry," the plaintiff's attorney, Mason Kerns, tells New Times. "Given how big it is, that wouldn't be possible. I think they provide a great service, I just think it should be done in process that doesn't make someone think they're getting double their deposit."
The Florida Deceptive and Unfair Trade Practices Act is being cited as part of the class action suit. It is a state statute similar to the Federal Trade Commission Act.
Attorneys representing DraftKings and FanDuel are likely to look towards the United Kingdom for reference in determining what is and what is not false advertising.
Years ago, the UK instituted the Advertising Standards Authority (ASA), which routinely monitors and fines betting firms for false or misleading advertising.
One of its key targets over the years has been the controversial Irish-based site, Paddy Power.
Paddy came under fire last year for pushing the envelope with bet taking on the Oscar Pistorius murder trial. Their ads culminated with the Hollywood Oscars and featured the paraplegic Olympic runner’s face adorning an Oscar statuette with the tasteless caption “Will He Walk”. Thousands of complaints were filed as a result.
Previously Paddy Power has been cited for associating gambling with one’s manlihood.
But never once has the ASA cracked down on Paddy Power’s advertised promotional offers, which in many ways mimic those of FanDuel and DraftKings.
Paddy Power’s rules and regulations clearly define how the bonus is to be used and, presumably, the two fantasy sites in question included similar wording on their respective websites.
The bonus award alone is required to be wagered (staked) 26 times, and on completion of this, is then converted to cash and placed in your casino cash balance
Once a bonus has been released to a players account an additional staking requirement must be met in order to convert the bonus into playable cash (see table below)
Regardless of the ultimate outcome, industry eyes will be monitoring this matter closely as it could prove precedent-setting not just for the fantasy sector but for the worldwide gambling sector as a whole.
- Alejandro Botticelli, Gambling911.com
