Christina Spicer  |  December 1, 2015

Category: Consumer News

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FanDuel class action lawsuitLast week, another class action hit the daily fantasy sports (DFS) website FanDuel Inc. alleging that the company misleads consumers into buying into the program by promising to match their initial payment, but then uses a pay out structure so restrictive that no one gets the promised incentive.

Lead plaintiffs Fernando Delgado and Ronald S. Randle allege in their class action lawsuit filed in Los Angeles Superior Court that FanDuel uses false advertising that promises 100 percent matching of consumers’ initial “buy-in” to the website.

However, the terms of the promised matching pay-out are too restrictive, according to the FanDuel class action lawsuit, and consumers never receive their matching payment form the company.

“FanDuel aggressively promotes itself as the leader in DFS,” the plaintiffs allege in the class action lawsuit. “FanDuel has put together a multi-million dollar advertising campaign focused on sports fans that play fantasy sports for fun with their friends and have induced these persons to participate on their website with the lure that winning fantasy sports on their website may result in million dollar payoffs.”

“As part of this advertising scheme,” the FanDuel class action lawsuit continues, “FanDuel entices these consumers with promotions meant to make individuals believe their initial deposits would be immediately matched and permit double the amount of play based on a single deposit, up to $200. In other words, if a person deposited $100, FanDuel represented that person would be immediately able to play with $200 worth of DFS games.”

However, “despite FanDuel’s uniform and unequivocal representations, plaintiffs and putative class members have not, and will not, receive the promised matching deposit bonus,” the FanDuel class action lawsuit alleges.

Both plaintiffs allege in the class action lawsuit that they made initial $25 deposits with FanDuel, but that their deposits were not matched. Instead, the plaintiffs allege, they received $1 each and would have had to spend $625 in entry fees to receive their initial $25 bonus.

According to the class action lawsuit, FanDuel is a website offering daily fantasy sports tournaments. The class action lawsuit alleges that FanDuel ran multiple commercials promising to match consumers’ initial payment into the program up to $200. The plaintiffs allege further that FanDuel did not really providing matching payments; however, the company offered a 4 percent bonus for each entry fee paid by consumers.

This class action over FanDuel’s alleged promise to match initial payments joins a multitude of other legal troubles facing the fantasy sports website along with it’s competitor, DraftKings. New York Attorney General Eric Schneiderman has filed a lawsuit to shut down DraftKings and FanDuel as illegal gambling operations under New York State law. Several putative class action lawsuits claiming that the companies violate consumer protection laws and promote illegal gambling have also been filed against FanDuel and DraftKings over the past several months.

Cases have also been filed against sports organizations including the Major League Baseball, the NBA, the National Hockey League and Major League Soccer, and sports networks, including Turner Sports, Time Warner Inc., NBC Sports Ventures Inc. and 21st Century Fox, alleging that they facilitated illegal gambling. Credit card companies and other firms have also been hit with a class action lawsuit over allegedly processing payments for DraftKings and FanDuel.

Delgado and Randle are represented by Marcus J. Bradley, Kiley Lynn Grombacher and David C. Leimbach of Marlin & Saltzman LLP, and Sahag Majarian of Law Offices of Sahag Majarian II.

Counsel information for the defendants was not immediately available at the time of publication.

The FanDuel False Advertising Class Action Lawsuit is Fernando Delgado, et al. v. FanDuel Inc., et al., Case No. BC602148, in the Superior Court of California, County of Los Angeles.

UPDATE: On June 30, 2016, daily fantasy sports player plaintiffs laid out their grievances in a 273-page consolidated class action lawsuit alleging DraftKings and FanDuel duped players into participating in illegal gambling operations that gave an unfair advantage to their own employees who also participated in the daily competitions.

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2 thoughts onFanDuel Hit with Class Action Alleging Deposit Bonus Scheme

  1. Top Class Actions says:

    UPDATE: On June 30, 2016, daily fantasy sports player plaintiffs laid out their grievances in a 273-page consolidated class action lawsuit alleging DraftKings and FanDuel duped players into participating in illegal gambling operations that gave an unfair advantage to their own employees who also participated in the daily competitions.

  2. Matt McDonnell says:

    I wonder if Draft Kings is next for the same suit. They both did the exact same thing. Pretty ridiculous.

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