Down in Broward County, Florida, attorney Mason Kerns filed a class-action lawsuit against DraftKings, one of the giants of the daily fantasy sports industry. Kerns is protesting against the signup bonuses offered by DraftKings, saying they amount to deceptive advertising. The class-action suit was filed in late-January in a Florida court. If the court receives the case, disgruntled former DraftKings customers will be able to sign on to the lawsuit, in certain instances.
When asked to explain his position by a reporter from the Broward Palm Beach New Times, Mason Kerns told the South Florida publication, "Our intention isn't to bring down the daily fantasy sports industry. 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."
DraftKings Match Bonuses Are Targeted
The lawsuit focuses on the welcome bonuses, which are advertised as 100% bonus when players register an account and make a payment. Online and mobile gamblers are going to know what these matching bonuses look like, at least the way they are advertised: if you deposit $100 at DraftKings, you get $100 in bonus cash.
The problem with that promise, says Kerns, is that it's deceptive. The lawsuit reads, "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."
Incremental Bonuses
Instead, DraftKings uses an incremental bonus system, so only a tiny amount of the bonus is activated at any given time--at least if you're a small customer trying to keep your gaming hobby under control.
Mason Kerns's lawsuit 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."
How Welcome Bonuses Work
Long time players at online casinos, poker sites, and sportsbooks will understand the contention. When someone signs up at an online casino, they expect to see their bonus in their player account as soon as they make a deposit. Perhaps they might need to input a bonus code to trigger their deal, but it's relatively automatic.
At DraftKings and FanDuel, the bonus is triggered at a 4% rate. Players have to wager a large amount to be able to trigger a small bonus, which is then credited to their account.
Mason Kerns Confident He'll Win
When asked by the Broward Palm Beach New Times whether his lawsuit had a chance to succeed, Mason Kerns replied, "If we weren't confident we definitely wouldn't have filed it. There might be some hurdles. I'm sure DraftKings is well represented. I expect a battle." DraftKings did not respond when reporters from the Miami-area newspaper asked for a comment or interview.
One can see Mason Kerns's point, and he might have a chance to succeed. When this journalist first signed up for an account at FanDuel, he felt like the bonus offer was not anything like the advertisement said it would be. I was expecting something more traditional from an online gamblers' perspective.
Chances the Lawsuit Succeeds
Whether a court of law is going to see the issue in the same light is a different matter. The chances are 1-in-10 that the judge in the case will be a fantasy football owner, because 40 million Americans now engage in the hobby each year. If the judge or several members of the jury in the case are daily fantasy sports fans, DraftKings might have some trouble on its hands.
Kansas Lawmaker Tries to Legalize Daily Fantasy Sports
In Kansas, a member of the state legislature is trying to legalize daily fantasy sports. Republican State Representative Brett Hildabrand of Shawnee disagrees with an August 2014 ruling by the Kansas Racing and Gaming Commission.
Back in August, the Racing and Gaming Commission ruled that one-day fantasy sports was illegal, using the odd reasoning that the fantasy sports is like the lottery. Under the Kansas Constitution, only the state is able to administer lotteries to the public.
Hildebrand Expresses Shock
Hildebrand says he was shocked by the decision. He said that upwards of 40 million Americans gamble on fantasy sports each year and the commission's decision is out of touch with the public mood. Also, it cannot be enforced, so it is a superfluous policy. Rep. Hildebrand said, "We don't want to be making criminals out of the average citizen of Kansas."
The commission, seemingly surprised at the backlash, posted a response on its website, "The commission's statement said, "no agency at the state or local level is ramping up efforts to go after (fantasy sports league) participants."
