DraftKings is dealing with a proposed nationwide class motion accusing the corporate of working an unlawful on-line sports activities betting enterprise by way of its DraftKings Predictions platform in states the place conventional on-line sportsbooks are nonetheless prohibited.
The criticism, filed July 28 within the U.S. District Courtroom for the District of Massachusetts and reviewed by ReadWrite, names DraftKings Inc. and subsidiary GUS III LLC, which operates as DraftKings Predictions. Plaintiffs argue the corporate offered sports activities wagers as federally regulated occasion contracts to sidestep state playing legal guidelines whereas main prospects to consider the product was legally distinct from standard sportsbooks.
California resident Michael Chan introduced the lawsuit on behalf of himself and a proposed class of shoppers who allegedly misplaced cash utilizing DraftKings Predictions. Based on the criticism, Chan registered for the platform whereas in California and “was not knowledgeable by DraftKings that Predictions is an unlicensed sportsbook when he wagered and misplaced cash on the app.”
The submitting argues DraftKings depends on its established sportsbook model, expertise and buyer base to market what plaintiffs describe because the practical equal of sports activities betting in states that haven’t accredited on-line sportsbooks.
“DraftKings has discovered one other means in: it deploys Predictions to evade these states’ playing legal guidelines, laws, and prohibitions, and sells shoppers sports activities bets which are functionally an identical to the wagers in its regulated sportsbook,” the criticism states.
Plaintiffs search to symbolize shoppers from Alabama, California, Florida, Georgia, Minnesota, New Mexico, South Carolina and Texas. The lawsuit says hundreds of shoppers could qualify, with alleged damages exceeding $5 million underneath the Class Motion Equity Act.
DraftKings Prediction technique faces take a look at with class motion lawsuit
A serious a part of the criticism depends on statements attributed to DraftKings executives throughout earnings calls and investor shows. It repeatedly references Chief Govt Officer Jason Robins, together with his remark that “prospects don’t actually even perceive the distinction” between DraftKings Sportsbook and DraftKings Predictions. The submitting additionally quotes Robins saying the merchandise “serve the identical prospects in the identical reside moments and leverage shared underlying infrastructure.”
Plaintiffs contend these remarks help their declare that Predictions extends DraftKings’ sportsbook into markets the place licensed on-line betting stays unavailable. The criticism additionally cites Robins’ assertion that “A number of the largest states within the nation like California, Texas, Florida, we weren’t current in with [online sports betting], and we’ve got Predictions there now.”
DraftKings launched the standalone DraftKings Predictions app throughout 38 states in late 2025 underneath Commodity Futures Buying and selling Fee oversight, describing it as a platform for buying and selling occasion contracts somewhat than putting sportsbook wagers. The corporate later introduced plans to develop by launching a market-making enterprise and, in Could 2026, superior its technique after Railbird Change submitted sports activities occasion contract certifications to the CFTC, together with templates resembling moneyline, point-spread and participant efficiency markets.
The criticism says DraftKings has been unjustly enriched by way of an unlicensed sportsbook and, for California shoppers, violated the state’s Unfair Competitors Regulation. Plaintiffs search restitution, disgorgement, attorneys’ charges, prices and restoration of alleged wagering losses. DraftKings had not responded to the allegations on the time the lawsuit was filed.
Featured picture: DraftKings
The publish DraftKings faces nationwide class motion over Predictions platform legality dispute intensifies appeared first on ReadWrite.