As one of the largest non-football betting weekends, known as the Final Four, approaches, DraftKings and FanDuel find themselves embroiled in a high-profile lawsuit. According to ESPN, the city of Baltimore is suing the two online sportsbooks over allegations of “misleading” tactics. Specifically, the lawsuit claims that these companies utilize analytics to target problem gamblers with promotional tools like bonus bets, which Baltimore argues violates its Consumer Protection Ordinance.
“These companies are engaging in shady practices, and the people of our city are literally paying the price,” said Baltimore Mayor Brandon Scott in a release. “DraftKings and FanDuel have specifically targeted our most vulnerable residents — including those struggling with gambling disorders — and have caused significant harm as a result. This lawsuit is a critical step to hold them accountable and protect all Baltimoreans.” At the heart of Baltimore’s complaint is the use of bonus bets, which are monetary credits usable only at the sportsbooks for a limited time (typically seven days or less). These credits may initially seem like “free bets,” but they also encourage frequent betting while allowing sportsbooks to collect data on customers for continued targeting.
“Defendants are not interested in people merely dipping their toes in the water: They want bettors to bet, in significant amounts, over and over,” the lawsuit states. “Some get hooked, and that’s the point.” Sports betting has been legal in Maryland since 2021, following the U.S. Supreme Court’s decision to strike down the federal ban three years prior. This past January, bettors in the Old Line State wagered over $457 million on DraftKings and FanDuel, with the nearest competitor, BetMGM, taking only $51 million, highlighting the emerging duopoly in the online sportsbook marketplace.
Baltimore’s lawsuit seeks not only injunctive relief to compel DraftKings and FanDuel to cease such practices and reform their platforms but also statutory penalties. Neither sportsbook has publicly commented on the lawsuit, and they each have 30 days to respond from a legal standpoint.
