Class action claims FanDuel and DraftKings designed platforms to drive compulsive betting and extend losses

On April 27, 2026, New York residents John Farley and Michael Fox filed a class action lawsuit against FanDuel and DraftKings in the U.S. District Court for the Southern District of New York.

The lawsuit alleges two of the country's largest sports betting operators designed their platforms to keep users gambling continuously and drive escalating financial losses through deceptive interface design, targeted promotions and behavioral data tracking. The complaint names Betfair Interactive US LLC, FanDuel Inc., FanDuel Group Parent LLC, Flutter Entertainment PLC and DraftKings Inc. as defendants.

How the platforms allegedly work

The class action lawsuit claims FanDuel and DraftKings turned sports betting from an occasional, event-based activity into a high-frequency product engineered for continuous wagering. Whereas traditional sports betting involves placing a bet before a game and waiting for the result, the platforms allegedly encourage users to place repeated live, in-game bets during sporting events, sometimes within seconds of a prior wager resolving.

The operators reinforce this environment with a stream of time-sensitive inducements, including profit boosts, bonus bets, money-back offers, cash-back promotions and bet refunds, the lawsuit claims. These promotions reportedly arrive through email, text, push notifications and in-app alerts designed to create urgency and make further wagering appear less risky than it was.

Both companies allegedly use customer data, betting history and behavioral patterns to identify users with escalating activity then direct promotions at them to extend their time on the platform and encourage loss-chasing.

The plaintiffs' alleged losses

Farley claims he started using FanDuel when the platform launched in New York. The lawsuit states that over roughly four years, he deposited approximately $11,000, much of it charged to credit cards. He alleges that cash-back deals, profit boosts, money-back offers and a "$5 bet, get $300" introductory promotion kept pulling him back along with email alerts whenever new promotions went live.

Fox says he primarily used DraftKings and lost approximately $5,000 in less than a year with what began as occasional wagering shifting into loss-recovery betting as his losses grew. The lawsuit claims he experienced significant anxiety and financial strain and concealed his sportsbook activity from his domestic partner. DraftKings allegedly offered him profit boosts claiming potential payout improvements of up to 50%, but Fox says his outcomes never improved.

The legal claims

The complaint brings four claims against the defendants:

  • New York General Business Law Section 349, which prohibits deceptive acts and unfair business practices directed at consumers
  • New York General Business Law Section 350, which prohibits false advertising
  • Negligence, which alleges the defendants failed to exercise reasonable care in designing and operating their platforms despite foreseeable risks of financial and psychological harm
  • Unjust enrichment, which is an alternative claim seeking the return of money users lost through the alleged misconduct

The lawsuit seeks actual damages, statutory damages, treble damages (damages tripled under applicable law), restitution, disgorgement of profits, declaratory relief, injunctive relief and attorneys' fees.

What this means for sportsbook users

The plaintiffs propose two classes: a nationwide class covering all U.S. account holders on either platform who encountered the alleged practices, and a New York subclass for users who engaged with the platforms in the state.

The defendants have not filed formal responses, and the allegations remain unproven. There is no settlement, no claims process and no money available at this time.