The City of Baltimore sued DraftKings and FanDuel parent Flutter on Thursday, claiming the sportsbooks lure in customers with deals, entice them into becoming problem gamblers, and excessively target these users to exploit them for financial gain.
“The platforms are designed to create disordered gamblers and then exploit them,” reads the 51-page complaint filed in Baltimore City Circuit Court.
The complaint says DraftKings and FanDuel use “bonus bets” and other offers to bring in customers and “hook” them on betting. Then, the filing claims, the sportsbooks “relentlessly ping their users to bet and bet often,” and “purposefully tweak their algorithms to target those likely to have gambling disorders and extract what the companies euphemistically refer to as ‘maximum potential revenue’ or ‘lifetime total value’ from each user over time.”
The companies have so much data on their users that they can target push notifications to their betting preferences, the suit says, and set up VIP programs that further personalize their experience with “hosts” who chat and give offers to frequent bettors. At least one local problem gambling organization has received an increased number of calls from young men as the sports betting industry grows, the suit claims.
The complaint references a widely-cited 2020 report from the U.K. parliament’s House of Lords that found just 5% of users produce 60% of the profits in online gaming.
The filing says many of the data-driven practices used to identify VIPs in the U.S. have been changed with government reforms to spot potential problem gamblers in the U.K. There, Flutter ended VIP programs and put in extra protections for users under 25 years old, the suit mentions.
Baltimore is the first U.S. city or state to take on sportsbooks in court for targeting problem gamblers. A woman in Pennsylvania sued DraftKings in February in federal court in New York, saying the company “intentionally targeted and preyed on” her even after she expressed financial struggles to her VIP “host.”
The city argues the companies violate Baltimore’s Consumer Protection Ordinance, and demand a jury trial.
“These companies are engaging in shady practices, and the people of our city are literally paying the price,” Baltimore mayor Brandon Scott said in a statement.
“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.”
Fanduel said that it “does not comment on specific allegations in pending litigation” but that it was confident it hadn’t broken Maryland law. A representative for DraftKings did not immediately respond.
