DraftKings Reaches Class Action Settlement in Massachusetts

A settlement was reached last week, in where it was agreed that DraftKings would pay $8 million to plaintiffs who brought a class action suit against the Daily Fantasy Sports and sportsbook operator.  The plaintiffs claimed that DraftKings engaged in advertising campaigns that misrepresented the difficulty of DFS contests, as well as the terms of the promo offers.

The agreement was reached in the District of Massachusetts court, and settles the claims of over 3 million people. Similar claims were brought against DraftKings rival, FanDuel but were not included in the class action agreement.

The settlement includes all people in the United States who made their first deposit into their DraftKings DFS account before January 2018, and who had ever run a loss at the site.

Ironically, most of the $8 million fund will not be paid out in cash. Instead, it will to be paid out in DK Dollars – credits to be used at the DraftKings site by the plaintiffs. Just $728 in cash will be paid out to former players at DraftKings who have since shut their accounts at the site.

As per a court document from the case:

“The settlement provides significant injunctive relief by effectuating changes to DraftKings’ online platform, and also provides valuable monetary relief in the form of ‘DK Dollars’ or US dollars to settlement class members who made a first-time deposit into their daily fantasy accounts prior to Jan. 1, 2018 and who are not net lifetime winners on DraftKings.”

In the settlement agreement, DraftKings did not acknowledge culpability but say that had “substantial and meritorious answers” to all the claims made against the company. However, DraftKings said that it was “desirable to settle the litigation” and therefore agreed to the settlement fee. DraftKings has committed to informing all affected parties through a dedicated website.

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