DraftKings and FanDuel Lawsuit Alleges Sportsbooks Engage in Deceptive Practices To Exploit Gambling Addiction

Complaint was filed on behalf of the Mayor of Baltimore City, indicating that residents spent $457 million on the two gambling sites in January 2025.

The city of Baltimore, Maryland has filed a lawsuit against DraftKings and FanDuel, alleging that the online sports betting websites employ algorithms and aggressive marketing strategies to cultivate gambling addictions among users, thereby causing significant harm to the lives of its residents.

The complaint (PDF) was brought in the state court system on behalf of the Mayor and City Council of Baltimore on April 3, naming Draftkings, Inc., based in Nevada, and Ireland-based Flutter Entertainment PLC, doing business as FanDuel, Inc. as defendants.

The state of Maryland legalized online sports gambling in 2021, which allowed the two companies to advertise in the state. However, the lawsuit indicates the companies have violated Maryland consumer protection laws by intentionally tailoring their websites to cause consumers, many of them in Baltimore, to develop gambling disorders.

Gambling addiction can involve symptoms such as constantly thinking about gambling, increasing bet amounts, chasing losses, and feeling irritable when trying to cut back. Over time, it can lead to financial ruin, legal troubles, job loss, strained relationships and even suicidal thoughts or actions.

Baltimore’s DraftKings and FanDuel lawsuit indicates that the companies exploited the known risks associated with gambling, by creating algorithms that detected addictive habits and offered the players incentives to keep betting.

In January 2025 alone, Marylanders placed more than $457 million in bets on the two platforms, with FanDuel bringing in $278.5 million in bets, and DraftKings pulling $178.9 million in wagers, the lawsuit notes.

The lawsuit alleges that the two sites collect massive amounts of data on users, looking for particular habits, such as checking their profiles at all hours, and “loss chasing,” which is a term used to describe frequent betting following losses in hopes of winning money back. Baltimore’s complaint indicates that the algorithm gives such people bonus bets, entices them to join “VIP” programs, and reduces incentives for those who are winning frequently or perceived by the algorithm to be potentially professional gamblers.

“Some people get hooked, and that’s the point. Defendants will relentlessly ping their users to bet and bet often, with compulsive gambling an inevitable result,” the lawsuit states. “The platforms are designed to create disordered gamblers and then exploit them.”

The lawsuit presents claims that these activities are unfair, abusive and deceptive, violating city trade practice laws. The city is asking for the maximum amount of statutory penalties, and injunctive relief to force the two websites to cease targeting and exploiting addicted gamblers.

The city’s claim joins other gambling addiction lawsuits in recent years filed by individuals and some states, such as New York, who have accused the two sites of preying on consumers with gambling disorders, and even creating those disorders intentionally to increase profits.