Nadrich Accident Injury Lawyers is representing those who have suffered gambling losses due to the misleading and intentional conduct of online sports betting websites such as DraftKings and FanDuel.
You may qualify for financial compensation in a lawsuit if you or a loved one:
- Used apps such as FanDuel, DraftKings, Caesars, BetMGM, Bet365, Fanatics, Kalshi, Polymarket, Hard Rock or ESPN Bet
- Experienced compulsive betting or developed an addition to gambling
- Suffered $10,000 or more in debt or losses from gambling
- Are under 18 years old and have gambling debt or losses
We are reviewing these claims throughout the nation. You may qualify for financial compensation for damages such as financial losses or mental health treatment.
According to a NerdWallet survey, 20 percent of Americans placed at least a single sports bet in 2024. This represented a 67 percent increase compared to 2023.
DraftKings recently settled with a New Jersey dad’s ex-wife after the dad stole money from the family, losing almost $1 million while gambling through the website.
In addition, a recent class action lawsuit filed in California seeks to recover compensation for residents of California who placed bets on FanDuel, claiming the website’s fantasy sports contests violate California law.
Our law firm has been helping those impacted by misleading advertising and intentional, malicious conduct since 1990 Our experience in helping people like you who were harmed by companies like FanDuel and DraftKings will allow us to fight for fair compensation for you.
We won’t charge you any fee until we win your case, as our only fee is a percentage of whatever money that we recover for you.
You shouldn’t have to face things alone if gambling apps led to you or a loved one suffering financially or emotionally. Call us today at (800) 718-4658 for a FREE consultation, contact us or fill out this page’s free case evaluation form if you or a loved one have suffered financial losses due to an addiction to online sports betting.
Sports Gambling Addiction Lawsuits: Key Takeaways
- Plaintiffs are alleging that major operators of sportsbooks utilized targeted promotions, VIP programs and behavioral analytics to make sure at-risk users kept gambling even though they were displaying obvious signs of addiction.
- Defendants in sports gambling addiction lawsuits include major operators such as DraftKings and FanDuel. These defendants possess significant capital and are sitting on significant amounts of promotional records, betting histories and user data.
- Liability in these cases is straightforward, turning on if operators continued to target users they knew were vulnerable.
- Addiction to gambling is a recognized condition. It causes measurable harm and has established diagnostic criteria.
- Key evidence in sports gambling addiction lawsuits includes betting logs, promotional communications, account activity and deposit histories.
- These lawsuits are being filed as scrutiny grows on sportsbook advertising, customer retention practices and responsible gaming.
Table of Contents
- Latest Update
- Why Are Sports Gambling Apps Facing Lawsuits?
- Who Can File a DraftKings or Fanduel Lawsuit?
- How Sports Betting Apps Encourage Addiction
- Common Sports Gambling Sites
- Schools That Helped Promote Gambling to Students
- Examples of Sports Betting Lawsuits Filed
- What Compensation Can You Recover in a Sports Gambling Lawsuit?
- FAQs
- Contact a Sports Gambling Addiction Lawyer Today
- Sports Gambling Addiction Lawsuit Updates
Latest Update
September 8, 2026 Update
A lawsuit filed on August 26 in Connecticut by the State of Connecticut seeks to stop Kalshi, a prediction market, from offering Connecticut residents sports event contracts, claiming the company is operating an unlicensed, illegal sports betting platform.
The lawsuit names KalshiEx LLC as the defendant.
The company has allegedly offered sporting wagers to residents of the state since January of 2025 via its app, website and other channels. The state claims the platform hasn’t ever hold or tried to obtain the license needed to offer sports wagering in the state.
Connecticut maintains that Kalshi’s sporting event contracts are “sports wagers under another name,” offering bets on season win totals, series and game winners, points scored, league rankings, player statistics and “combos,” which the state says are essentially parlays.
Kalshi is arguing that its contracts are derivatives that are federally regulated under the Commodity Exchange Act and can’t be prohibited or regulated by states like Connecticut.
The lawsuit claims that Kalshi was sent a cease-and-desist letter by the Connecticut Department of Consumer Protection in December 2025. Kalshi responded by filing a federal lawsuit looking to prevent officials with the state from enforcing the state’s gambling laws. August 7 saw a federal judge deny Kalshi’s request that asked for a preliminary injunction.
The filing noted that courts in other states, and the Sixth Circuit, have rejected Kalshi’s argument that its sports contracts are shielded from state gambling regulations by federal law.
Connecticut is also alleging that Kalshi is operating outside of consumer safeguards which are imposed on sportsbooks that are licensed, including a Connecticut law which prohibits sports betting by those under 21. Kalshi allegedly lets people 18 and older create accounts and bet on sporting events, meaning that some high school students could qualify for accounts even though they aren’t old enough to gamble legally in the state.
The lawsuit accuses Kalshi of marketing to people under 21 and paying people under 18 to create promo content. The state claims that Kalshi briefly utilized a 15-year-old video game streamer as its affiliate and promoted a program that targeted students at universities such as Yale.
The state also alleges Kalshi deceptively represented the company’s sporting contracts as legal around the nation. The complaint contains an advertisement which describes the company as “The First Nationwide Legal Sports Betting Program.”
Connecticut alleges that Kalshi utilizes investment terminology like market risk, price fluctuations, financial strategy and trading to advertise its sports contracts. The state argues that this language misleadingly portrays risky bets as investment products which could provide financial security.
The lawsuit is raising allegations of deception, underage gambling, illegal sports wagering and unfairness. It is seeking injunctive relief under the sports wagering laws of the state. It is asking the court to permanently prevent the company from offering sports wagering which is unlicensed in the state. It is asking for civil penalties, restitution for consumers and disgorgement of profits and revenues.
Why Are Sports Gambling Apps Facing Lawsuits?
Lawsuits alleges that platforms like DraftKings, FanDuel and Ceasars designed their apps to be addictive, similar to casino gaming, with instant betting and gamified rewards.
Lawsuits alleges that “risk-free” bets and promotional offers were misleading, encouraging high-stakes betting habits.
Many complaints argue that there was a lack of proper age verification or spending limits.
A class action lawsuit filed against DraftKings in Pennsylvania in July 2025 alleges that:
- DraftKings misleads customers into engagement with a product that is known to be addictive.
- The company’s business model involves luring naive gamblers into the development of gaming addictions.
- The company falsely promises customers that they’ll get free money to wager without risk.
- The company entices customers to make progressively worse bets until their funds get exhausted.
- The companies’ purportedly “no-risk” bets actually require that customers deposit funds and bet using their own money. If they lose the bets, they are not refunded with actual money, but are rather awarded expiring “bonus bets” which can’t be converted into cash or withdrawn.
- The company’s “bonus bets” pay out far less money upon winning than bets placed with US dollars
- The company advertises that they’ll match new customers’ initial deposits up to $1,000. However, the customers actually can’t receive the full $1,000 unless they initially deposit $5,000, wager $25,000 in 90 days, and only wager on specific long-shot bets. The awards are given in the form of betting credits rather than cash
- The company’s “casino deposit match promotions” promise thousands of dollars worth of bonuses, but trick customers into opting into confusing promotions which require them to wager up to $200,000 in seven days to obtain $2,000 worth of non-withdrawable credits. The promotions allow the company to take all money from customers, including their winnings, if they don’t wager the amount of money needed to satisfy the promotion’s wagering requirements.
A class action lawsuit filed against DraftKings in April 2025 alleges that:
- DraftKings identifies and cultivates those who are the most vulnerable to misleading promotions and the most likely to lose significant amounts of money.
- The company uses user data to create user profiles based on betting behavior, financial information and demographic, then deploys targeted marketing to maximize how much they deposit then lose.
- The company knowingly targets addicted gamblers, frequently targeting users on state self-exclusion lists or users who have asked them to close or suspend their accounts.
A class action lawsuit filed against FanDuel in July 2025 alleges that:
- The fantasy sports contests that FanDuel offers in California are illegal in California.
- The FanDuel website repeatedly assures potential customers that the website is legally operating in California when, in fact, it is not.
- FanDuel acted with malice, displaying despicable conduct done with a knowing and willful disregard of the public’s rights, by inducing California plaintiffs to gamble as well as lose money despite knowing that its operations were not legal in the state.
Who Can File a DraftKings or Fanduel Lawsuit?
You might qualify for a financial recovery in a lawsuit if you or a loved one:
- Utilized apps such as Bet365, Fanatics, ESPN Bet, Caesars, BetMGM, FanDuel or DraftKings
- Ended up developing an addiction to gambling, or ended up compulsively gambling
- Lost $10,000 or more gambling, or incurred $10,000 or more in gambling debt
- Are under 18 and developed gambling debt or gambling losses
How Sports Betting Apps Encourage Addiction
Gambling, including betting on professional sports teams and college sports teams, can be extremely addictive.
Studies have shown that sports betting can be one of the most addictive types of gambling. It has been reported by the National Council on Problem Gambling that problem gambling in sports bettors, including those doing online wagering on teams like the Los Angeles Rams, Los Angeles Chargers or the San Francisco Giants, is at least twice as common as it is in gamblers in general.
Reasons that sports betting, including retail sports betting and online sports betting, can be so addictive include:
- Sports betting apps’ designs intentionally create addiction: These platforms are designed intentionally to encourage high-frequency, compulsive betting. They heavily borrow from addiction psychology, utilizing behavioral triggers which are commonly found in mobile gaming and casinos.
- Sports betting apps have addictive features: These features include “risk-free” bets, flash and live betting which encourage impulsive decisions, bonus traps which keep users engaged by requiring multiple bets or deposits, badges, streaks and points which simulate progress even while money is lost, and balances which display “credits” instead of dollars to keep users disconnected from actual losses.
- Sports betting apps may target problem gamblers: These apps analyze user behavior and build profiles to find high-risk users, who then receive things like push notifications following losses which encourage them to give it another go, custom reload offers and bonuses which are timed to re-engage the users, in-app promos and social media ads which are tailored to betting activity, and loyalty tiers and VIP perks which reinforce continued play in spite of financial harm.
- They activate the reward system of the brain: Gambling, like alcohol and drugs, can trigger dopamine release. Dopamine is a neurotransmitter which is associated with reward and pleasure. This creates an excitement or “high” which people might crave. This can lead to a cycle of having to bet more to get the same feeling.
- Convenience and accessibility: As mobile and online sports betting has become more common, it has become extremely easy to place bets anywhere, any time. This increases the risk that a problem is developed.
- Chasing losses: It is common for those addicted to betting to keep betting to try to win back lost money. This can lead to deeper addiction and more financial problems.
- Coping and escape mechanism: Some people use gambling to cope with negative emotions like depression or anxiety, relieve stress or escape from problems.
- Cognitive distortions: Addictions can be fueled when problem gamblers have irrational beliefs regarding the likelihood of winning or how they can influence outcomes.
Common Sports Gambling Sites
Common sports gambling sites include:
- DraftKings
- FanDuel
- BetMGM
- ESPN Bet
- Fanatics
- Bet365
- Caesars
- BetRivers
- Hard Rock Bet
- Borgata
- Kalshi
- Polymarket
Schools That Helped Promote Gambling to Students
Recent years saw universities enter marketing partnerships alongside sports betting companies. They granted the platforms access to students via event sponsorships, social media promotions, campus signs and co-branded emails.
The arrangements sometimes lacked proper safeguards for the prevention of underage gambling, or usage of student loans to place bets. This raised concerns regarding normalizing gambling on the campuses of colleges.
These universities included:
Michigan State University
January 2022 saw Michigan State University announce a partnership with Caesars Sportsbook. Caesars obtained naming rights at Spartan Stadium, access to MSU sports property digital content, and signage at sporting events.
However, the partnership was terminated in May 2023 due to concerns regarding the impact sports betting was having on students.
Louisiana State University
September 2021 saw Louisiana State University announce an agreement with Caesars Sportsbook.
Caesars was granted naming rights at Tiger Stadium, presence on LSU Sports’ mobile app, and signs at athletic venues.
The partnership ended up facing criticism for potentially influencing students, including underage students. The agreement was terminated in June 2023.
University of Colorado Boulder
September 2020 saw the University of Colorado Boulder establish a partnership with PointsBet.
PointsBet was granted ads at Folsom Field, an incentive program which paid the school $30 for every user who signed up as well as placed a bet with a promo code that was CU-specific, and integration into broadcasts of games.
The partnership was ended in March 2023 amidst public backlash.
Examples of Sports Betting Lawsuits Filed
California Fanduel Lawsuit Alleges Unlawful Betting Services
A class action lawsuit filed on July 2 in California alleges that FanDuel is allowing California residents to participate in its daily fantasy sports contests despite knowing that these contests are illegal forms of gambling in California.
The lawsuit accuses FanDuel of strategically and intentionally leading consumers into thinking that these contests are legal when they are not.
The lawsuit seeks to:
- Have the court find that FanDuel committed violations of the law
- Have the court provide injunctive relief it deems appropriate
- Have the court award monetary relief to the plaintiffs
The lawsuit is seeking to recover compensation for every California resident who placed a bet on the website while living in the state.
New Jersey DraftKings Lawsuit Settlement
In 2025, DraftKings settled with a New Jersey dad’s ex-wife. The dad allegedly lost almost $1 million of money belonging to the family via DraftKings.
The ex-wife alleged the ex-husband stole money from her as well as her two kids to support his gambling habit, which DraftKings had “nurtured.”
The ex-husband allegedly drained credit cards in secret, as well as the kids’ savings accounts.
The settlement’s size was not disclosed. The ex-wife had asked for the full $942,232.32 which her ex-husband lost gambling, arguing it belonged to her as well as her two kids.
The lawsuit argued that the VIP hosts at DraftKings should have been able to recognize that the ex-husband was a problem gambler.
The lawsuit also argued that due to anti-money laundering regulations, the company is obligated to verify funds’ sources regarding high-stakes players, and failed to do so in this case.
DraftKings Gambling Addiction Lawsuit
A lawsuit was filed on February 12, 2025 in New York against DraftKings.
The lawsuit alleges that DraftKings knew the plaintiff was an addicted gambler, and upgraded her to their VIP program. The lawsuit alleges this program is operated and calculated to sustain, initiate and exacerbate gambling addictions by providing enticements to escalate and continue betting activity through VIP hosts.
The lawsuit alleges that the plaintiff clearly displayed problem gambling signs around the VIP hosts, including asking DraftKings for a loan so she could pay a mortgage.
The lawsuit alleges that DraftKings acknowledged she was showing signs of gambling addiction, asking her if she required help – yet continued to provide her with incentives to gamble while waiting for her answer.
Baltimore Sues FanDuel and DraftKings
On April 3, 2025, the City of Baltimore, Maryland filed a lawsuit against FanDuel and DraftKings, claiming that the companies employ aggressive marketing and algorithms to nurture gambling addictions, significantly harming the lives of Baltimore residents.
The lawsuit accuses the companies of violating the state’s consumer protection laws by intentionally designing their websites to cause people to develop gambling addictions.
The lawsuit alleges the companies exploited known risks regarding gambling by developing algorithms that detected addiction behaviors, offering players incentives to continue betting.
The lawsuit claims the companies collect data on users, looking for specific habits like loss chasing and checking profiles frequently. The lawsuit alleges that when users display these behaviors, they are given bonus bets and enticed to join their VIP programs. The lawsuit also alleges that when the algorithm detects that users are frequently winning or may be professional gamblers, it reduces incentives for them.
The lawsuit alleges that these practices are deceptive, abusive and unfair.
2015 Class Action Lawsuits Against FanDuel and DraftKings
In 2015, class action lawsuits were filed against FanDuel and DraftKings in New York and Illinois.
The lawsuits claimed that the daily fantasy games offered by the companies were misrepresented as being fair.
The lawsuits were prompted by revelations that the companies let employees enter contests on the other company’s site for prizes of cash.
The lawsuits alleged that DraftKings did analytics to figure out winning strategies, strategies’ return on investment, and how FanDuel lineups would do in DraftKings contests.
The lawsuits alleged that employees with access to these strategies could have potential advantages on competitors’ sites.
The revelations led to both websites saying they would ban employees from competing on competitors’ sites.
Ex-Jacksonville Jaguars Employee FanDuel Lawsuit
In 2024, a former employee of the Jacksonville Jaguars who stole over $22 million from the Jaguars, filed a lawsuit against FanDuel, alleging the company “exploited” his addiction to gambling, intentionally ignoring its anti-money laundering and responsible gaming protocols.
The lawsuit alleged that FanDuel encouraged him to continue to gamble despite him showing signs of gambling addiction.
According to the lawsuit, FanDuel gave the man $1.1 million worth of credits as well as trips to the Miami Grand Prix, the 2021 and 2022 Masters, and the championship game of college football in 2023.
The lawsuit alleges that the man’s VIP host at the company communicated with him up to 100 times per day from 2021 to 2023, contacting him on days he didn’t gamble to ask why.
What Compensation Can You Recover in a Sports Gambling Lawsuit?
If you or a loved one has suffered gambling-related losses or debt due to a gambling addiction, you may qualify for compensation which includes:
- Gambling-related loss reimbursement: This includes credit card or student loan funds which were used to bet
- Mental health treatment coverage related to financial distress and addiction
- Repayment of any deposits which were made under promotional terms which were deceptive
- Emotional suffering damages, including for family strain, depression or anxiety linked with gambling losses
- Punitive damages, especially in cases involving platforms knowingly targeting addicted users or users on a self-exclusion list
- Compensation for professional or academic consequences, like lost job opportunities, dropping out of school, or failing classes.
Our lawyers have found that the average settlement amount in these case is $75,000+.
These lawsuits don’t just seek to recover financial losses. They also seek to hold gambling websites responsible for their business practices’ long-term impacts.
FAQs
Is Sports Betting Allowed in California?
No. Sports betting, including online sports betting, isn’t legal in California. The only exception is betting on horse racing.
Online sports betting sites as well as retail sportsbooks (meaning physical locations) are not legal in California.
The reasons that legalized sports betting has not reached California yet include:
- Voter-rejected ballot initiatives: California voters, in November 2022, rejected propositions 26 and 27. Proposition 26 sought to legalize sports betting in-person at horse racing tracks and tribal casinos. Proposition 27 sought to legalize online sports betting and mobile sports betting.
- Conflicting interests: The two sports betting initiatives failed in part due to conflicting campaigns and deep divisions between commercial sports betting companies and tribal groups seeking to control sports betting and the potential market. It was felt by tribal groups that Proposition 27 was a threat to their economic lifeline and sovereignty.
- Challenges and complexity: The process towards enabling legal California sports betting is made complex by concerns regarding financial allocation of tax revenues, data privacy, and gambling addiction.
What’s next for sports wagering in California?:
- It’s not clear when legal sports betting or online gambling will reach California. It is predicted that California bettors will be able to begin betting on teams like the Los Angeles Lakers, San Diego Padres, San Jose Sharks, Sacramento Kings, Los Angeles Kings, Golden State Warriors, Los Angeles Clippers and Anaheim Ducks from 2026 to 2028.
- Further efforts towards enabling legal online sports betting, and in-person sports betting, will probably require a vote by the public and a constitutional amendment.
- Any sports betting bill, for it to be successful, will have to secure the support of the tribal groups in the state, possibly via a unified tribal organization which collaborates with commercial operators.
- In 2025, the Sports Betting Alliance proposed a partnership between a unified tribal organization and major operators. The partnership includes guaranteed payouts to all 109 tribes every year, as well as a system which follows state tax regulations.
In California, all gambling is administered by the California Gambling Control Commission.
Are FanDuel and DraftKings Legal in California?
California users can currently only use the daily fantasy sports features of DraftKings and FanDuel. California users cannot access the other betting features of these online sportsbooks.
However, in July 2025, California Attorney General Rob Bonta said that the daily fantasy sports features of websites such as DraftKings and FanDuel are prohibited by state law as they involve bets being placed on sporting events.
As of August 2025, FanDuel and DraftKings are continuing to allow California sports fans to use their daily fantasy sports features.
A class action lawsuit filed in July 2025 is seeking financial compensation for California sports bettors who placed bets on FanDuel while living in California. The lawsuit claims that FanDuel is promoting daily fantasy sports features to consumers in California, directly violating gambling laws in the state.
Can I Withdraw Money From DraftKings in California?
Yes. While traditional online sports betting is not legal in California, DraftKings allows users to participate in daily fantasy sports contests, and these users can withdraw any winnings won in these contests.
Users can withdraw their funds via PayPal, debit and credit cards, checks or Interac.
Can I Sue DraftKings for Losses?
Yes, you can sue websites that let you bet online, like DraftKings and FanDuel, for losses, especially if you think those losses were due to negligence, false advertising or deceptive practices. Lawsuits have gotten filed against sports betting options like DraftKings and FanDuel for these reasons.
Reasons for possible lawsuits:
- Deceptive advertising and marketing: If a website used false or misleading advertising to entice you, particularly about the profitability or legality of their services, you may be able to sue.
- Failure to provide tools for responsible gaming: If a website didn’t adequately provide resources or tools to help you manage gambling habits, and this led to significant losses, this may be a reason for a lawsuit.
- Negligence: If a website failed to exercise reasonable care regarding their operations, and this led to you losing money, it could lead to a lawsuit.
- Consumer fraud: If a website misrepresented its services or engaged in fraudulent practices, this could be grounds for a lawsuit.
Who can sue?:
- Individual users: You might have grounds for a lawsuit if you think you suffered financial losses due to the inaction or actions of a gambling website.
- Class action lawsuits: If numerous lawsuits were affected similarly, a class action lawsuit may get filed, allowing the group to sue together.
If you’re considering a lawsuit, you should:
- Consult with a lawyer: It’s vital to consult with an attorney to talk about your case and figure out if your claim is valid.
- Collect evidence: Gather all relevant info, like communication with the gambling website, advertising materials and your transaction history.
- Understand your legal options: A lawyer can explain your potential remedies and legal rights, such as the possibility of recovering legal fees, emotional distress damages and financial losses.
Do I Need Proof of My Gambling Losses to File a Lawsuit?
Yes. However, lawyers will help you gather documentation.
The information you’ll need to start your lawsuit includes:
- What betting apps you gambled on
- The age when you opened your accounts
- An estimation of the total amount of your gambling losses
You won’t be asked to provide sensitive documents online. Every single one of your records will get reviewed confidentially.
How to Stop Sports Betting Addiction?
Treatment options for compulsive gambling include:
- Mental health professionals: Some licensed mental health pros specialize in treating behavioral addictions. These pros can help you understand the underlying events or conditions which could have led to your addiction. You can also call your insurance company and ask for a referral to a local mental health counselor.
- Online therapy: Online therapy, especially cognitive behavioral therapy, has been found to be as effective as therapy in person for various mental health conditions. It is cost-effective, convenient and confidential.
- Cognitive behavioral therapy: This is a type of therapy which focuses upon changing your behavior via the modification of negative thought patterns. It can provide you with skills to make positive environment and lifestyle changes.
- Support groups: Support groups such as Gamblers Anonymous can help those who struggle with gambling addiction, helping people improve coping skills while meaningfully connecting with others.
- Inpatient treatment: Those who feel incapable of stopping sports betting, with multiple parts of their life affected by it, could benefit from inpatient treatment. Inpatient treatment can provide people with the support and environment needed to improve coping skills and address any co-occurring conditions.
- Medications: Research has shown promise regarding some medications for reducing gambling urges, including Naltrexone, Lithium and other antipsychotic and antidepressant medications.
- Self-help techniques: Closing gambling accounts and deleting sports betting apps can help. You can ask sports betting organizations to permanently close your accounts. Some websites permanently block sports betting sites from devices, like Gambam, Gamblock and BetBlocker. You can ask family members to help you manage your money. You can also fill out self-exclusion forms that ban you from gambling in particular states.
What Does Gambling Addiction Look Like?
The signs of gambling addiction include:
- Being preoccupied with your gambling, like constantly planning activities involving gambling, and how to acquire more money for gambling
- Having to gamble more and more money to acquire the same thrill
- Attempting to stop, cut back or control gambling without success
- Feeling irritable or restless when you attempt to cut back on gambling
- Gambling to relieve feelings of depression, anxiety, guilt or helplessness
- Gambling to escape your problems
- Gambling more to recover gambling losses
- Lying to others to hide your gambling’s extent
- Losing or risking work opportunities, jobs or important relationships due to gambling
- Asking people to help you with financial problems because you gambled too much
The Diagnostic and Statistical Manual of the American Psychiatric Association states that gambling disorder is characterized by recurrent, persistent problematic gambling which leads to clinically significant distress or impairment.
What States Is DraftKings Legal In?
You may be wondering, “is sports betting legal in my state?”
Currently, as of August 2025, DraftKings online sports betting is live in Wyoming, West Virginia, Virginia, Vermont, Tennessee, Pennsylvania, Oregon, Ohio, North Carolina, New York, New Jersey, New Hampshire, Michigan, Massachusetts, Maryland, Maine, Louisiana, Kentucky, Kansas, Iowa, Indiana, Illinois, Washington DC, Connecticut, Colorado and Arizona.
The legal status of DraftKings varies by state because the website operates via separate state licenses due to the repeal of the Professional and Amateur Sports Protection Act in 2018.
What Are the Emotional and Financial Consequences of an Addiction to Sports Betting?
For a lot of young people, what will start out as just entertainment can quickly turn into a crisis. Students as well as recent graduates have reported gambling away their rent money and student loans, maxing out their credit cards and draining their bank accounts. Others have lost whole paychecks prior to covering their basic needs, or misused money given to them by their parents.
Financial loss, though, isn’t all of the damage. Sports betting addiction victims often end up experiencing:
- Depression and anxiety
- Intense shame and guilt
- Dropout or academic failure
- Suicidal behavior or thoughts
- Lost financial independence
- Straining of family relationships
One in five gambling disorder patients have attempted suicide, according to a 2023 Indian Journal of Psychiatry editorial.
The betting apps are always there, the gambling doesn’t stop, and the impact on mental health grows with each loss.
Families around the country have lost loved ones after people have committed suicide due to being overwhelmed by gambling’s psychological toll. The marketing and design strategies these companies use have consequences which reach far past financial loss. Courts are now being asked to make sure these companies are held accountable.
Contact a Sports Gambling Addiction Lawyer Today
Companies like DraftKings and FanDuel need to be held accountable for deceptive marketing as well as intentionally fostering addictions.
Our law firm has been helping people hold companies accountable for their bad behavior for over 35 years.
You will not owe us a single penny if we don’t recover compensation for you, as our only fee is a portion of the money we recover for you.
Call us today for a FREE consultation at (800) 718-4658, contact us or fill out this page’s free case evaluation form if you or a loved one suffered gambling losses or debt due to a sports gambling addiction.
Sports Gambling Addiction Lawsuit Updates
August 12, 2026 Update
A DraftKings Predictions class action lawsuit has been filed by three consumers who allege that DraftKings illegally accepted sports wagers via its “Predictions” platform, disguising betting as event contracts in locations where the company doesn’t have the licenses required to run a sportsbook.
The lawsuit, which was filed on August 3 in Massachusetts, names Gus III LLC and DraftKings Inc. as defendants.
The lawsuit alleges that DraftKings intentionally marketed and structured its Predictions platform to keep profiting from sports betting in states where sportsbook operations aren’t allowed or need licenses the company doesn’t have.
The complaint alleges the plaintiffs opened accounts with DraftKings Predictions between December of 2025 and March of 2026.
However, it is alleged by the lawsuit that the plaintiffs weren’t informed that the platform operated as a sportsbook that was unlicensed, that the company and its affiliates could take positions which were opposite customers’ trades, or that DraftKings profited from each transaction no matter what the outcome was.
The plaintiffs claim that DraftKings represented its products as trading opportunities or event contracts even though the transactions allegedly constituted illegal sports wagers under state laws.
The lawsuit is seeking restitution of funds that were allegedly lost through the platform, claiming DraftKings was unjustly enriched via accepting wagers through a platform that was unlicensed.
The plaintiffs are seeking to represent a class of consumers nationwide who allegedly lost funds through the platform while using it in states where the company wasn’t authorized to run a sportsbook.
The lawsuit is seeking refunds of consumers’ gambling losses in addition to attorneys’ fees, costs and additional relief determined appropriate by the court.
August 4, 2026 Update
A class action lawsuit filed on July 28 in Massachusetts by a California man alleges that the recent expansion by DraftKings into prediction markets is attempting to circumvent state laws which prohibit online gambling and sports betting.
The lawsuit names Gus III LLC and DraftKings Inc. as defendants.
The man, who is seeking class action status for everyone else similarly situated, claims that DraftKings has defrauded consumers by releasing DraftKings Predictions, which is simply a way to evade state gambling laws and financially harm the residents of those states for profit.
While this classification is facing multiple legal challenges, predictions markets have been protected to date from illegal gambling lawsuits because of claims that wagers are, like investments, derivatives, and thus aren’t gambling products.
The lawsuit alleges that DraftKings Predictions is a transparent attempt to engage in sports gambling in states where such gambling isn’t legal. The lawsuit points out that wagers on the platform aren’t substantially different than wagers on the DraftKings sportsbook app.
The lawsuit claims that DraftKings takes advantage of confusion to profit where sports betting isn’t legal. It is noted by the lawsuit that the company, in June 2026, reported overseeing around $11.3 billion in trading volume in the past year, with two-thirds of that coming from DraftKings Predictions.
Of that two-thirds, almost 70 percent of the wagers were made in states where sports betting is not legal, the lawsuit claims.
The lawsuit notes that DraftKings Predictions is available in Alabama, California, New Mexico, Minnesota, South Carolina and additional states where sports betting is not legal, with the attorneys general of some states threatening or taking legal action against DraftKings.
The lawsuit is seeking class action status as well as compensation for anyone who used DraftKings Predictions in states where sports betting is not legal.
July 28, 2026 Update
A lawsuit filed on July 20 in New Jersey by a New Jersey man alleges that even employees of FanDuel are vulnerable to algorithms and tactics which online sportsbooks use in order to cause U.S. consumers to become gambling addicts.
The lawsuit names DraftKings Inc., Crown NJ Gaming Inc., Resorts Digital Gaming LLC, Betfair Interactive US LLC, Flutter Entertainment PLC, Meadowlands Racetrack and Golden Nugget Atlantic City LLC as defendants.
The plaintiff alleges that he lost tens of thousands of dollars due to developing an online sports gambling addiction, even though he worked for FanDuel previously. The defendants’ aggressive promotional practices and marketing allegedly drove his compulsion. He argues that the platforms knowingly exploit their platforms’ addictive nature in order to profit while disregarding the mental and financial health of users.
The lawsuit alleges the plaintiff started using FanDuel and DraftKings in 2018, then was fired by FanDuel in 2021, and was prohibited from gambling on both platforms.
The plaintiff estimates he placed nearly $320,000 in bets on FanDuel and $105,000 on Draftkings prior to being hired by FanDuel. Once he was fired, he allegedly resumed gambling, losing over $40,000 combined on both platforms.
The plaintiff claims the platforms’ algorithms detected he was becoming addicted, then exploited him.
The lawsuit alleges that the gambling apps track all user interactions, such as time spent on the app, wagers placed and moments of hesitation in order to create algorithms that are hyper-personalized. It alleges that this data is used to bombard gamblers with targeted advertisements and notifications when they’re the most vulnerable, such as right after big losses, or late at night.
The lawsuit claims that FanDuel and DraftKings noticed when his addiction worsened, providing him with exclusive promotions, bonus bets and personalized offers.
July 9, 2026 Update
A new study published in the Custech International Journal of Education found that almost 40 percent of students surveyed at the University of Benin reported gambling, and that these students showed increased rates of mental health concerns.
The study warns that gamblers in college are more likely to experience more depression, anxiety and stress than their peers.
Of the students who reported gambling, 44 percent did sports betting, 25 percent did card games, 22 percent did dice games, 16 percent did the lottery and 14 percent played in casinos.
The researchers noted that a lot of university students play sports and feel familiar enough with them that they feel it gives them an advantage in sports betting.
The researchers found that students who displayed signs of gambling addiction suffered a higher rate of poor academic outcomes, depression-like symptoms, emotional instability and stress.
The researchers recommended that educational institutions include gambling awareness programs in orientation programs and recommended that counselors be given training in addressing and identifying gambling addiction.
July 1, 2026 Update
A class action lawsuit which has been proposed is alleging that DraftKings secretly shares and collects personal information from website visitors, allowing third-party data brokers to identify users, track users’ online activity and build profiles on consumers without their consent or knowledge.
The lawsuit also alleges the company is violating privacy laws in California by deploying tracking tech which captures identifying information from visitors to the website.
The lawsuit alleges that the company embedded tracking software from Comscore, The Trade Desk and NextRoll into its website, letting those companies collect device and browser information from visitors.
The lawsuit claims the software utilizes “browser fingerprinting” to compile technical details about visitors’ devices, locations, browser settings and other characteristics in order to create unique identifiers. This information can then get matched with existing consumer databases in order to identify users, monitor their activity across unrelated websites and, ultimately, deliver targeted advertising.
The lawsuit alleges that DraftKings does not obtain the consent of users before letting their information get shared and collected.
The lawsuit is seeking statutory damages of $5,000 per violation of the California Invasion of Privacy Act, in addition to punitive damage, disgorgement or profits, restitution and an injunction which would prohibit the company from continuing the alleged practices.
May 8, 2026 Update
A class action lawsuit filed on April 27 in New York alleges that FanDuel and DraftKings are designed to lead to gambling addiction which causes serious emotional and financial harm.
The lawsuit claims that the defendants practiced deception, didn’t intervene despite obvious signs of compulsive gambling, and are in violation of consumer protection laws.
According to the complaint, two former players lost large amounts of money on the websites. They indicate they were subject to repeated promotions like bet-refund promotions, profit boosts and other marketing which was designed to encourage continued gambling. The lawsuit claims this occurred despite the two exhibiting red flags like evidence of compulsive gambling.
The lawsuit alleges that because the apps can be quickly redesigned to display new gambling opportunities and change odds in real time, they encourage gamblers to stay active for long periods, especially during live sports.
The lawsuit alleges the two men have lost around a combined $16,000 on the websites.
The lawsuit is seeking class action status for consumers who had accounts on FanDuel or Draftkings.
April 27, 2026 Update
Plaintiffs pursuing a lawsuit against sportsbooks including DraftKings have filed an appeal which seeks to restore their lawsuit after a judge dismissed it last month.
The lawsuit was filed in July 2025 by five residents of Pennsylvania who claimed they were targeted by the site with advanced algorithms which intentionally analyzed them for possible gambling problems, then exploited them, leading to gambling addiction as well as huge personal and financial losses.
The plaintiffs were seeking class action status for those who participated in promotions which included deposit match offers as well as “no sweat” or “risk-free” bets, alleging that the promotions were misleading. The class that was proposed also included those who developed addictions to gambling.
Last month saw a judge grant a motion to dismiss the lawsuit that was filed by the defendants. The defendants argued they did not have a duty of care to those who could be at risk of developing gambling addictions, arguing that Pennsylvania courts have not recognized such a duty.
The plaintiffs’ notice of appeal was filed on April 17. They have not yet filed an appeal brief which outlines the basis for why they believe the judgment should get changed and how they believe the judge erred by dismissing the case.
February 20, 2026 Update
A judge in Massachusetts has decided not to dismiss a lawsuit which accuses DraftKings of using a misleading $1,000 bonus bet promo, rejecting DraftKings’ request for summary judgment, letting the case proceed.
The class action lawsuit was filed in April 2024 by two plaintiffs who claim they opened DraftKings accounts after they were told $1,000 bonuses were being offered to new accounts.
The lawsuit claims the promotions were misleading, with details and caveats hidden in fine print which made the offer less valuable.
The lawsuit alleges DraftKings purposefully obscured the following about the promotion:
That users were required to deposit a minimum of $5,000 in their accounts
That users were required to place $25,000 worth of bets in 90 days
That the promotion applied only to new DK Sportsbook users and didn’t include Daily Fantasy Sports accounts
DraftKings responded to the lawsuit by asking that the case get thrown out since the information was in advertisements’ fine print and “terms and conditions” links.
However, the judge ruled that the company didn’t provide direct evidence that those terms and conditions were ever seen by the plaintiffs.
The judge ruled that she could not conclude that the terms and conditions were prominent enough and provided enough notice to the consumer.
January 21, 2026 Update
The Nevada Gaming Control Board has filed a civil enforcement action against Polymarket, according to a January 16 press release.
The complaint asked the court for an injunction and declaration to stop the company from offering wagering which is unlicensed in violation of the laws of Nevada.
According to the press release, the company is operating a prediction and derivatives exchange market which sells event contracts in Nevada.
The Board, according to the press release, considers the offering of sports event contracts to be wagering activity. Thus, the Board claims, entities who offer these contracts need to be licensed.
The Board announced that it is deeming the company’s operations to not be lawful in Nevada.
The Board stated that since the gaming industry is important to the state economy and the welfare of Nevada’s inhabitants, it needs to be licensed, assisted and controlled to protect the safety, public health, general welfare, good order and morals of Nevada’s inhabitants.
January 14, 2026 Update
A class action lawsuit is accusing internet personality Adin Ross and musician Drake of helping promote an illegal gambling website which blatantly tries to skirt numerous states’ gambling laws.
The lawsuit was filed in Virginia on December 31 and alleges that Stake.US paid influencers in order to make it appear legitimate and lure people into gambling.
The lawsuit has been filed against Ross, Drake, Sweepsteaks LTD (which is doing business under the name Stake.US) and George Nguyen. The lawsuit alleges that Drake paid Nguyen via Stake.US to run “botting operations” which falsely inflated how many times Drake’s songs got played online.
The lawsuit alleges that Stake.US is a front for illegal gambling in many states, including Virginia.
The lawsuit alleges that while it is legal for the website to advertise itself as providing “free” gambling that doesn’t involve real money, this is actually a scheme which is meant to bypass the law.
Website users buy a fake currency known as “Gold Coins” which they gamble in supposedly free games. These Gold Coins, though, get purchased with real money.
The lawsuit alleges that Drake was paid $100 million in order to promote the website, and that some of this money was then paid to Nguyen and Ross to create streaming farms and bot farms to artificially inflate how many times Drake’s songs are played online on services like Spotify.
The lawsuit is seeking compensatory damages, asking for the site to be shut down, and claims that the defendants violated the Virginia Consumer Protection Act and Racketeer Influence and Corrupt Organizations Act.
January 8, 2026 Update
Lawsuit Alleges Draftkings Violates Multiple States’ Laws
A class action lawsuit which was filed on December 30 in Michigan by a Michigan man claims that DraftKings is violating the laws of multiple states by stepping around rules which let consumers set betting limits.
New York, Louisiana, Iowa, Indiana, Connecticut, Colorado and Michigan have laws which require that gamblers have the options to put limits on their gambling activities, like wager limits or deposit limits which require 24-hour waiting periods to change. These laws are designed to fight financial hardship and impulse gambling.
The lawsuit argues that DraftKings doesn’t fully include these mandated protections, arguing that this is intentional and intended to addict and ensnare consumers.
The lawsuit alleges that DraftKings fails to include the mandated 24-hour waiting period, arguing the laws are useless without this waiting period.
The man argues that the lack of this 24-hour waiting period led to him depositing over $25,000.
Survey Finds Sports Betting Problems Are Surging
A new survey is warning that sports betting legalization is leading to a strong rise in addiction to gambling, leading to growing mental and financial harm.
The survey found that rates of disordered gambling, pathological gambling and problem gambling have sharply increased from 2010 to 2024, even doubling in some cases.
The findings show that disordered gambling increased from 3.4 percent in 2010 to 5.7 percent in 2024.
The amount of people who had ever gambled and the rates of at-risk gambling and low-risk gambling saw little change between 2010 and 2024.
However:
- Problem gambling rose from 1.9 percent to 2.7 percent
- Probably pathological gambling rose from 1.5 percent to 3.1 percent
- Disordered gambling rose from 3.4 percent to 5.7 percent
The survey discovered higher gambling problem rates in:
- Single men
- Hispanic or African American men
- Those with high school diploma education or below
December 15, 2025 Update
FanDuel is facing an additional class action lawsuit which alleges that the company is violating a gambling ban in California via illegal promotion of fantasy sports games.
The lawsuit was filed on December 5 and names FanDuel Inc., Flutter Entertainment PLC and FanDuel Limited as defendants.
While gambling has been banned in California for over 150 years, and the state rejected an attempt for sports betting to be legalized in 2022, it is estimated by the California Business Bureau that California residents spend around $200 million every year on Daily Fantasy Sports games.
The lawsuit alleges that FanDuel has been operating in California since 2015, that FanDuel Fantasy is offered to California residents, and that the company claims this is legal when it is not.
The lawsuit claims that since FanDuel is illegally operating in the state, California residents using the service have never agreed to or signed a contract with Fanduel, as any such contracts are illegal and invalid.
The lawsuit accuses Fanduel of acting with fraud, oppression and malice.
The lawsuit is seeking declaratory judgment for the class members.
October 23, 2025 Update
A study published in JAMA Internal Medicine entitled Growing Health Concern Regarding Gambling Addiction in the Age of Sportsbooks found that Google searches for gambling addiction help jumped by 23 percent after Murphy v National Collegiate Athletic Association, the Supreme Court ruling which allowed states other than Nevada to legalize sports betting.
According to the study, this represents 6.5 to 7.3 million additional Google searches.
The researchers found that especially sharp spikes happened in states which launched sportsbooks online: Ohio saw 67 percent more searches, Pennsylvania saw 50 percent more searches and Massachusetts saw 47 percent more searches.
The researchers concluded that there was less than a one in 25.6 billion chance that these results occurred by chance.
September 18, 2025 Update
Canadian health experts have called for additional laws to protect Canada’s youth from addiction to gambling.
An editorial was published by medical editors of the Canadian Medical Association Journal on September 8, warning that advertisement for sports gambling websites is negatively affecting adolescents.
The editors are concerned about marketing tactics designed to create compulsive gambling. The editors suggest the ads are ubiquitous.
The authors indicated that, because of this, addiction to gambling is spreading throughout the young people of Canada.
The editors note that, in Norway, suicide was one of the main causes of death in those addicted to gambling from 2008 to 2021.
A UK study from 2021 found that problematic gambling increased suicide risks in people between the ages of 16 and 24 by nine times in men and almost five times in women.
The editors call for lawmakers in Canada to get rid of all sports betting advertising in broadcasts which are likely to be viewed by minors.
August 1, 2025 Update
A DraftKings lawsuit has been dismissed by a federal judge.
The judge ruled that the $1,000 bonus bet offer from the platform wasn’t misleading, and that it was clearly explained by the terms what conditions were required for qualification.
The lawsuit alleged that the company failed to honor the offer, and had sought to pursue damages for all consumers in New York who tried to redeem the offer.
While DraftKings won this specific case, this ruling doesn’t address growing concerns regarding the operation of sports betting platforms as well as the people they target.
July 18, 2025 Update
A class action lawsuit was filed in Pennsylvania on July 15, alleging that DraftKings as well as its “no sweat” and “risk-free” promotions are designed to cause consumers to develop gambling addictions.
The lawsuit alleges that DraftKings is profiting from deceptive ads which suggest that players will get easy wins and free money. The lawsuit alleges that the platform’s system uses player data and complex algorithms to foster compulsive gambling.
The lawsuit alleges that the company’s promotions have “hidden terms” which require that customers gamble “substantial funds” which “they almost always lose.”
The lawsuit claims that the company’s promises of “No Sweat” and “Risk-Free” bets are false, since the company requires that players deposit funds to cover bets and will not return money when they lose bets.
The lawsuit alleges that numerous customers have lost money because of the deceptive advertising, and suggests that the company might intentionally be misleading its users in order to profit.
June 11, 2025 Update
A report by The Atlantic highlights how no centralized effort in the United States exists to quantify or track how common addiction to online gambling is, even as people in the United States wagered what is estimated to be $150 million worth of sports bets in 2024.
USA Today has also published a similar report.
The reports show that young American men are the primary targets of advertisements for sports betting, as well as the people most negatively affected by gambling addiction. They warn about the platforms being intentionally designed to cause young men to develop gambling addictions.
The Atlantic noted that gambling ads are now seen more often during NFL broadcasts than beer ads, and that commentators often mention point spreads during commentary.
The Atlantic noted that it’s not difficult to take part in online gambling in any state, whether it’s legal to or not, something that platforms take advantage of.
Experts have raised concerns about the possible long-term mental health and financial impacts on America as these websites become legal in more states and more popular.
May 16, 2025 Update
A new study published on May 12 found that most teenagers who have gambling problems frequently use online sports betting websites such as FanDuel and DraftKings.
The researchers warned that almost eight percent of teenagers in Minnesota are frequent gamblers.
One quarter of frequent teenage gamblers, and 75 percent of problem teenage gamblers said they used online sports betting sites. This led to the researchers calling for additional efforts to raise awareness regarding the platforms’ dangers.
The researchers found that the two most frequent forms of gambling were informal sports gambling and formal sports betting.
The researchers noted that gamblers with problems frequently reported gambling in multiple ways, suggesting that sports betting could be a pathway for problematic and frequent gambling.
May 8, 2025 Update
A new study found that the legalization of sports betting led to a 23 percent increase in gambling addiction searches on Google, and that the spikes were even higher in states with mobile betting apps.
The researchers found that mobile platforms were more strongly correlated with searches related to addiction than betting locations which are physical.
Pennsylvania saw a 50% increase in addiction-related searches, while Massachusetts, New York and New Jersey saw 47%, 37% and 34% increases, respectively.
The researchers warned that this data probably only reflects the early stages of a bigger wave of harm related to gambling.
The researchers suggested that there’s a need to address sportsbooks’ health implications as well as the broader societal implications of gambling problems.
