Baltimore Sues Leading Operators Over Alleged Exploitative Practices

The City of Baltimore has ignited a major legal battle, taking aim at two dominant figures in the U.S. sports wagering industry: FanDuel and DraftKings. In a lawsuit filed in Baltimore City Circuit Court, the city accuses these operators of using deceptive marketing practices that exploit individuals with gambling addictions, thereby exacerbating gambling-related harms and flouting local consumer protection laws. Mayor Brandon Scott has been vocal about the motivations behind this bold move, asserting that increasingly aggressive and misleading campaigns by these gambling giants are causing profound societal damage.

Central to the lawsuit is the contention that the so-called “bonus bets” offered by these companies are misleadingly advertised and designed to foster compulsive gambling. These heavily marketed incentives for new customers often have restrictive terms, expiring within a week, thus pressuring users to gamble frequently within a limited timeframe. According to the legal complaint, this practice unfairly targets vulnerable individuals, including those battling gambling addiction, driving them into a cycle of repeated gambling and financial strain. Additionally, the lawsuit highlights that both companies utilize aggressive data profiling techniques to identify and target high-risk users, thereby maximizing their spending through tailored VIP programs and personalized offers.

Further aggravating the issue, FanDuel and DraftKings are accused of collecting an extensive array of data points on each user to craft their aggressive marketing strategies. Flutter-owned platforms reportedly gather up to 186 individual data points per bettor, enabling them to identify and target those most likely to continue gambling. The complaint points out that while these high-profile operators have already proved their ability to conduct business ethically and sustainably in other markets, such as the UK, their practices in the U.S. appear focused on maximizing profit at the cost of consumer welfare.

For instance, Flutter’s UK operations have adopted several responsible gambling measures, including financial vulnerability checks, curtailing VIP programs, and restricting gambling for users under 25. The lawsuit suggests that similar measures could be implemented in the U.S. to safeguard users, arguing that both FanDuel and DraftKings possess the capability to identify and assist at-risk gamblers using their existing data collection systems. This lawsuit could set a groundbreaking precedent as the first publicly-initiated legal action against a major sportsbook in the United States, potentially ushering in new regulatory frameworks aimed at creating a fairer and more responsible gambling environment.

While FanDuel has yet to issue a detailed response to the lawsuit, the company has stated