DraftKings is dealing with a proposed nationwide class motion accusing the corporate of operating 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 grievance, 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 introduced sports activities wagers as federally regulated occasion contracts to sidestep state playing legal guidelines whereas main clients to imagine the product was legally distinct from typical 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. In line with the grievance, 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 purposeful equal of sports activities betting in states that haven’t accredited on-line sportsbooks.
“DraftKings has discovered one other manner in: it deploys Predictions to evade these states’ playing legal guidelines, laws, and prohibitions, and sells shoppers sports activities bets which can be functionally an identical to the wagers in its regulated sportsbook,” the grievance states.
Plaintiffs search to characterize 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 beneath the Class Motion Equity Act.
DraftKings Prediction technique faces take a look at with class motion lawsuit
A serious a part of the grievance depends on statements attributed to DraftKings executives throughout earnings calls and investor shows. It repeatedly references Chief Government Officer Jason Robins, together with his remark that “clients don’t actually even perceive the distinction” between DraftKings Sportsbook and DraftKings Predictions. The submitting additionally quotes Robins saying the merchandise “serve the identical clients 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 grievance additionally cites Robins’ assertion that “A number of the greatest states within the nation like California, Texas, Florida, we weren’t current in with [online sports betting], and now we have Predictions there now.”
DraftKings launched the standalone DraftKings Predictions app throughout 38 states in late 2025 beneath Commodity Futures Buying and selling Fee oversight, describing it as a platform for buying and selling occasion contracts moderately than inserting sportsbook wagers. The corporate later introduced plans to develop by launching a market-making enterprise and, in Might 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 grievance says DraftKings has been unjustly enriched by way of an unlicensed sportsbook and, for California shoppers, violated the state’s Unfair Competitors Legislation. 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.
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