To feed his ever-growing sports betting habit, DraftKings’ user “Mdallo1990” allegedly emptied his wife’s bank accounts, maxed out her credit cards, and even stole Christmas and birthday money from his children, according to a new lawsuit’s claims.
First reported by The Independent, Mdallo1990’s wife, Lisa D’Alessandro, filed the lawsuit accusing DraftKings of negligence, fraud, and violations of the New Jersey Consumer Fraud Act. The suit was filed on Thursday with the United States District Court for the District of New Jersey.
Mdallo1990 wagered a total of $15 million with the online sports betting website DraftKings over a four-year period, losing $942,232 that did not belong to him, according to the lawsuit.
The suit doesn’t claim that DraftKings should have done more to stem her husband’s gambling addiction. In fact, it claims DraftKings did everything it could to exacerbate the problem.
“To be clear, this suit does not allege liability on the basis that Defendants passively permitted a problem gambler to use its gambling platform,” the complaint argues. “Rather, this suit alleges violation of New Jersey statutory and common law because Defendants actively participated in the addiction of Mdallo1990 by targeting him with incentives, bonuses, and other gifts to create, nurture, expedite, and/or exacerbate his addiction.”
The suit claims that DraftKings’ VIP hosts spoke to him almost daily, enticing him to deposit money beyond his means with offers of free bets, gifts, and loss credits. The suit alleges that DraftKings never asked Mdallo1990 to verify the source of his gambling funds via a W-2 form or a bank statement, which its own company policy requires for big, active, gamblers. At one point, Mdallo1990 was wagering more than four times his annual income, something DraftKings could have easily detected.
Big online sportsbooks getting more scrutiny
It’s never a good time to get sued. But this is a particularly bad time for DraftKings to be accused of predatory behavior. On the same day the New Jersey lawsuit was filed, Utah Sen. Mike Lee and Vermont Sen. Peter Welch wrote a letter to Department of Justice and Federal Trade Commission officials regarding "Possible Anticompetitive Conduct" by DraftKings and FanDuel.
"We write to raise concerns regarding FanDuel's and DraftKings's conduct that may be violating Section 1 of the Sherman Act prohibition on coordination to obstruct or impair competition," the senators wrote. "We urge you to look into these allegations to ensure that competition is protected and consumers continue to benefit from innovation and new offerings in sports entertainment."
Since the U.S. Supreme Court lifted the ban on sports betting in 2018, FanDuel and DraftKings have emerged as the nascent industry’s market leaders. Together, they represent a market share of 67%, according to a recent report by Eilers & Krejcik Gaming, LLC.
