Hooked by Code: Sportsbooks Sued for Addictive Tech

Mere hours after a Los Angeles jury determined that Meta and YouTube inflicted harm upon a young individual by deploying habit-forming functionalities, legal representatives involved in the matter initiated litigation against DraftKings and FanDuel. The lawsuit accuses these sportsbooks of employing comparable technology and approaches to those used by social media firms, aiming to sustain customer engagement in betting and, in some instances, precipitating the development of wagering dependencies.

In a personal injury claim submitted on Wednesday to a Massachusetts state court, the attorneys contend that the sportsbooks monitor users’ activities and leverage this information to persuade them to continue gambling “precisely when they are most impressionable, such as late at night or following a substantial loss.”

“The defendants possess complete insight into users’ problematic wagering behaviors and subsequently urge them to place more bets via focused advertisements, customized ‘perk’ offers, and ‘alert’ messages,” the complaint asserts.

FanDuel chose not to offer a statement. DraftKings did not provide an immediate reply to an inquiry for comment.

This legal action marks the second filed this week in collaboration with the Public Health Advocacy Institute (PHAI), a legal research hub at Northeastern University. On Tuesday, clients represented by PHAI pursued legal action against FanDuel, DraftKings, the NFL, and data firm Genius Sports in a Pennsylvania state court, alleging they furnish a “known addictive product.”

These cases are indicative of a recent increase in gambling-related lawsuits. Nevertheless, similar complaints have previously been dismissed, with judges ruling that sportsbooks and casinos bear no legal responsibility for overseeing their patrons’ betting habits.

The newest lawsuit targets the algorithms employed by the sportsbooks.

Jennifer Hoekstra, a partner at Aylstock, Witkin, Kreis & Overholtz, PLC, the firm representing the claimant, stated that sportsbooks have adopted the identical methodology as social media and video game enterprises. Hoekstra, who informed ESPN she contributed to discovery and briefing for the California social media case, mentioned that sportsbooks could implement protective measures to prevent gamblers from losing control, but the “applications are designed to heighten their addictive potential.”

“They evolve and tailor themselves to each individual user,” Hoekstra conveyed to ESPN. “Upon logging in, the algorithm recognizes your identity and interests. It appears prominently, thereby becoming more captivating for that person.”

The plaintiff downloaded the DraftKings and FanDuel applications around 2023 — after their legalization in Massachusetts — and, according to the lawsuit, engaged in minor, recreational wagers while observing games. Eventually, his gambling escalated into “an uncontrollable dependency on the defendants’ sports betting platforms,” the legal document alleges.

DraftKings and FanDuel furnished him with VIP account managers, who extended incentives such as bonuses and tickets to sporting events, which the lawsuit contends were an endeavor to ensure he placed more bets.

That initial year, on FanDuel, he staked nearly $200,000, approximately double his pre-tax earnings.

In 2024, the complaint detailed, his activity on FanDuel surged to $1.3 million, “reflecting disordered utilization of the platform.” The subsequent year, his wagers surpassed $1.5 million, and he resigned from his employment. He is presently undergoing therapy for a gambling dependency, as per the lawsuit.

Gambling addiction complaints have been repeatedly rejected in multiple states. A federal judge in Pennsylvania on Monday dismissed a class-action suit against DraftKings that alleged the sportsbook’s VIP hosts and promotional efforts led to gambling addiction. The judge determined that “encouraging individuals to gamble, even if those individuals are compulsive gamblers, does not meet the stringent criteria of extreme and outrageous conduct.”

Matthew Litt, a New Jersey attorney who has initiated numerous recent gambling addiction lawsuits but is not involved in this week’s cases, remarked that gaining progress on such matters has proven challenging due to outdated legislation.

“There has been no acknowledgment that one carries a casino or a sportsbook… in their pocket 24 hours a day,” Litt told ESPN.

Hoekstra affirmed that her lawsuit stands apart because it claims physical detriment instead of financial loss.

“We are asserting that an actual physical harm is being inflicted through the addiction,” Hoekstra declared. “And that is the distinction with ours, that there exists a flawed product that was intentionally crafted to induce this harm.”

A survey performed by the National Council on Problem Gambling last year revealed that nearly 20 million adults reported experiencing at least one problematic gambling behavior “frequently” within the past year. This figure denotes a decline from a surge during the COVID-19 pandemic but remains elevated compared to 2018, when legal sports betting began to expand across the nation.

The lawsuit referenced a 2024 study on gambling in Connecticut that discovered less than 2% of state residents are categorized as problem gamblers; however, that 2% was accountable for 51% of the sports betting revenue in the state.

A February study conducted by the Harris Poll on behalf of the National Council on Problem Gambling determined that 33% of respondents aged 21 to 44 had placed a sports wager before reaching 21, which is the legal age for gambling in most states. Experts suggest that young individuals face a heightened risk of developing gambling problems.

In the social media lawsuit, attorneys contended that the platforms “heavily borrowed from the behavioral and neurobiological methods employed by slot machines and exploited by the cigarette industry” to maximize youth engagement and drive advertising income. On Wednesday, a jury in Los Angeles mandated Meta and YouTube to disburse $6 million in restitution.

Disclosure: ESPN maintains a business collaboration with DraftKings.