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Popular US sportsbook DraftKings has reached an agreement with the Connecticut Department of Consumer Protection (DCP) that would see it pay over $3 million to roughly 7,000 players for promoting misleading bonus offers. This settlement follows an investigation prompted by consumer complaints regarding unclear terms in the company’s marketing materials.
The DCP accused DraftKings of violating state advertising regulations by failing to adequately disclose important wagering requirements associated with its “Casino Deposit Bonuses” and “Deposit Matches.”
Promotional offers made between October 2021 and January 2023 came under scrutiny, including one specific promotion that ran from December 2 to December 4, 2022, which did not meet regulatory requirements.
In addition to the refunds, DraftKings will contribute $50,000 to support consumer protection initiatives, which will be used for complaint resolution, education, and enforcement of consumer laws.
DraftKings Chose to Settle Without Admitting Fault
DraftKings has firmly denied all allegations of wrongdoing related to the misleading bonus offers. Despite this, the company opted to settle the matter by voluntarily discontinuing the disputed promotions and implementing a series of corrective measures.
These include establishing new marketing and disclosure standards, providing training for employees, and committing to formal reporting obligations to the Connecticut Department of Consumer Protection (DCP) through 2031.
As part of the settlement, DraftKings will also inform affected customers via email and ensure refunds are issued either as account credits or mailed checks, depending on each customer’s account status. Any unclaimed refunds must be kept for a year and will be reissued upon request.
“We are committed to compliance with all regulatory requirements,” the spokesperson for the company stated. “We value our relationship with the Connecticut Department of Consumer Protection and will continue to work collaboratively with them.”
This isn’t the first time DraftKings has faced scrutiny in Connecticut. Last summer, the operator dealt with a separate issue, resulting in a $19,500 fine for operating a slot game that failed to pay out as advertised. In that case, numerous players reported not receiving any wins despite wagering significant amounts on the game, and the company had to refund $23,909 to affected players.
Clearer Bonus Terms and Enhanced Compliance Measures Required
To ensure better clarity in its promotions and avoid future issues, DraftKings has agreed to enhance its marketing practices significantly. The company will actively promote its “Casino Education Hub,” which serves as a resource for new users, offering clear tutorials on how to navigate casino deposit bonuses.
First-time users in Connecticut will receive ongoing notifications about bonus rules unless they choose to opt out.
DraftKings will also implement annual training for its advertising and marketing teams focused on Connecticut’s laws. This training aims to ensure that all employees involved in promotions are familiar with the state’s legal requirements.
Furthermore, the settlement prohibits DraftKings from using terms like “free,” “risk-free,” or “complimentary” to describe any bonuses or rewards unless they truly meet those definitions. If there are any conditions or wagering requirements, these must be clearly displayed to avoid any confusion.
The company is also restricted from using similar phrases such as “gift” or “given without charge” when there is a cost or risk involved, and must be transparent about the type of bonus currency given, clearly distinguishing between different forms such as DK dollars and US dollars.
All terms related to redemption periods and the use of winnings must be fully disclosed, ensuring players have a complete understanding of the limitations tied to promotional offers.
“We are pleased with the outcome of this investigation and that affected consumers will be made whole,” stated DCP Commissioner Bryan T. Cafferelli.
“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 added.
“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.”
Source: NEXT
