Louisiana Lawsuit Alleges DraftKings and FanDuel Use AI to Prey on Problem Gamblers

A Louisiana lawsuit accuses DraftKings and FanDuel of using tech-driven data on their mobile sports betting apps to deliberately target and exploit problem gamblers.

Filed in the Civil District Court for the Parish of Orleans, the proposed class-action lawsuit demands a jury trial to determine if the Louisiana sportsbook leaders have violated state consumer protection laws.

The crux of the complaint contends that DraftKings and FanDuel use AI-backed personalization to keep losing bettors wagering. The lawsuit alleges that the online sportsbooks ignore or bypass self-exclusion and responsible gaming tools in violation of Louisiana’s Sports Wagering Act.

“Harrowing accounts proliferate in which people describe feeling targeted and exploited by FanDuel and DraftKings, even after they tell representatives from the companies that they fear they are losing control and cannot, for example, pay their mortgage,” the lawsuit alleges.

Bally’s Baton Rouge and Amelia Belle are additionally named as defendants, as those casinos respectively anchor the online sportsbooks for market access in Louisiana.

Lawsuit: Sportsbook Apps ‘Defective’

The complaint alleges that the defendants’ actions are unfair, deceptive, abusive, willful, against public policy, and prohibited by law. Attorneys representing the proposed class, with initial plaintiffs including three Louisiana residents–Adrian Payton, Toi Smith, and Yolanda Perkins–allege that DraftKings and FanDuel are violating the Louisiana Products Liability Act (LPLA).

The LPLA serves as the exclusive remedy in the state for plaintiffs seeking damages over a defective product. Under the statute, plaintiffs must prove that a product contains an unreasonably dangerous defect, that the manufacturer knowingly permitted it, and that the defect caused physical or financial harm.

To win a claim, the plaintiff must prove one of four specific defects: construction or composition defect, design defect, inadequate warning, or breach of express warranty.

The lawsuit alleges that DraftKings and FanDuel do not have adequate warnings about their products’ “highly addictive nature,” including “conspicuous, medically accurate warnings detailing the addictive potential of the interfaces.”

The lawsuit contends that DraftKings and FanDuel are fully aware of the addictiveness of their sports betting apps through their own customer data tracking, “yet failed to take reasonable steps to warn users.” The lawsuit seeks the recovery of all plaintiff deposits on the online sportsbooks.

Sportsbooks T&Cs

Neither DraftKings nor FanDuel has filed a response to the Louisiana complaint lodged on Oct. 22. Industry observers expect the defendants to petition for dismissal with prejudice on the grounds that state law imposes no statutory obligation on operators to police consumers’ consumption.  

Furthermore, both platforms rely on extensive terms of service requiring users to acknowledge gambling risks and waive civil recourse. For instance, DraftKings’ user agreement mandates that customers “indemnify, protect, defend and hold harmless DraftKings … from and against any and all third party claims, liabilities, losses, damages, injuries, demands, actions, causes of action, suits,” and associated legal costs.”