DraftKings To Pay $3 Million Back To Connecticut Customers In Settlement Over Deposit Bonuses
Settlement follows an investigation into whether the operator’s promo offers were misleading
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DraftKings will pay $3 million back to customers in Connecticut after an investigation from the state’s Department of Consumer Protection (DCP) into whether the operator’s deposit-match promos broke laws related to misleading advertisements.
The settlement, announced by the DCP on Thursday, concerns two promotions — a “50% Casino Deposit Match” offer and a “Casino Deposit Bonus” — offered between Oct. 19, 2021, when online sports betting and casino gaming launched in the state, and Jan. 4, 2023, when the offer ended.
The terms of the settlement suggest that the allegedly misleading terms likely concerned playthrough requirements, and use of phrases such as “free” or “risk-free.”
The DCP alleged that DraftKings violated a provision in the state’s gaming laws that says ads must “not contain inaccurate or misleading information that would reasonably be expected to confuse and mislead patrons in order to induce them to engage in gaming.” In addition, it claimed the operator broke a rule forbidding operators from using “any type, size, location, lighting, illustration, graphic, depiction or color resulting in the obscuring of any material fact.”
DraftKings ultimately agreed to pay back funds that may have been lost because of details of the promotion. The terms of the settlement note that this “shall not be considered an admission of liability or wrongdoing or a violation of any law for any purpose.”
The slightly-over-$3 million total will be shared among 7,075 customers who took part in offers involving the deposit match or deposit bonus. That would mean an average of $425 would be returned per customer. DraftKings will also pay $50,000 to the DCP.
In addition, the operator’s marketing staff in Connecticut will undergo additional training, and DraftKings’ marketing of bonuses will include measures promoting its “Casino Education Hub.” The business will also have to submit compliance reports for the next five years.
“Gaming operators must clearly communicate the terms of any promotion to their customers, including requirements to wager a certain amount or other conditions to obtain a promised award,” DCP Gaming Division Director Kris Gilman said in a statement.
“We are happy that DraftKings has agreed to assess its promotions, provide additional training to its employees regarding Connecticut’s laws and regulations, and return funds to consumers who misunderstood and in many cases were completely unaware of the terms of the promotions they participated in.”
Customers affected by the promotional offers should receive communication about their refunds within 60 days, according to the DCP. For customers who still have an active DraftKings account, the money will be paid into their account.
“DraftKings is committed to operating in compliance with all regulatory requirements,” a DraftKings spokesperson said. “We value our relationship with the Connecticut Department of Consumer Protection and will continue to work collaboratively with them.”
