Baltimore alleges that two prominent sports betting operators are exploiting gamblers by using deceptive and unfair practices.
The mayor and city council filed a lawsuit against DraftKings and Flutter-owned FanDuel on Thursday for violating Baltimore’s Consumer Protection Ordinance.
Key takeaways
- Baltimore officials accuse DraftKings and FanDuel of using bonus bets to induce wagers and hook problem gamblers.
- The city is seeking civil penalties that would force the operators to stop what it believes is targeting and exploitation.
- The lawsuit calls for the sportsbooks to use their data collection to help identify customers with gambling issues.
“These companies are engaging in shady practices,” Baltimore Mayor Brandon Scott said, according to WMAR2 News in Baltimore. “The people of our city are literally paying the price.”
City officials believe, according to the complaint, the online sportsbooks used bonus bets to induce wagers and “hook those new users on gambling.”
FanDuel and DraftKings are the two Maryland sports betting market leaders, combining to generate $346.2 million of the $463.2 million online bettors wagered in February.
Seeking penalties
Baltimore is “seeking civil penalties and injunctive relief to remedy defendants’ violations.” The city wants a court to force statutory penalties and order the sportsbooks to stop targeting and exploiting “disordered gamblers.”
Baltimore officials accused FanDuel’s and DraftKings’ “so-called” VIP programs of using those tactics.
“Defendants will relentlessly ping their users to bet and bet often, with compulsive gambling an inevitable result,” the city stated in the court document.
“Indeed, recent reporting has shown that mobile gaming platforms 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.”
Data driven
The lawsuit stated that 186 customer attributes create patterns used against Maryland sports betting customers with gambling issues.
“This is no small matter: those with gambling disorders have higher rates of suicidal ideation than even those struggling with other forms of addiction, and are often the perpetrators and victims of domestic violence,” the city stated in the filing. “This is particularly troubling, considering that a localized prevalence study, conducted in 2022, found that approximately 8.6% of Maryland adults had experienced disordered gambling in their lifetime.”
The lawsuit includes several other issues with problem gambling and says operators should use their data to identify customers who need to be cut off or notified of more responsible behavior. This is a similar point host John Oliver made recently on HBO’s Last Week Tonight with John Oliver.
“DraftKings and FanDuel have sought to guarantee their profitability by cheating, hoping to hook, and then ultimately exploit, as many users as possible,” the suit states.
