Baltimore claims that DraftKings and FanDuel are using unfair and deceptive tactics to lure in gamblers. The two online sportsbooks are the market leaders in Maryland. Together, they accounted for $346.2 million of the total $463.2 million wagered in February in the state.
“These companies are engaging in shady practices,” Baltimore Mayor Brandon Scott said. “The people of our city are literally paying the price.”
Targeting problem gamblers
In a document filed to the courts, the city accused DraftKings and FanDuel of deliberately encouraging gambling addiction, “Some get hooked, and that’s the point. Defendants will relentlessly ping their users to bet and bet often, with compulsive gambling an inevitable result.”
The document quoted examples of bonuses offered by the two popular online sportsbooks. “DraftKings had a promotion of $150 in “bonus bets” for new users, with that “bonus” coming in the form of six separate $25 “bonus bets” that must be used within seven days of sign up. FanDuel currently has a similar promotion: $150 in bonus bets that must be used, in increments, within seven days. ”
The complaint goes on to say, “DraftKings and FanDuel have sought to guarantee their profitability by cheating, hoping to hook, and then ultimately exploit, as many users as possible.”
Online sportsbooks bonuses
Others may question whether the bonuses referenced constitute “cheating”. These tactics are fairly standard in the industry. In fact, many online sportsbooks and crypto betting sites will offer more attractive sign-up offers.
Promotions such as free bets are a big draw for customers. Nearly 60% of players utilize free bets when presented with them. Companies such as FanDuel and DraftKings allocate approximately 20-30% of their marketing budgets to promotional bonuses, incentives, and incentives.
It is worth the outlay as the average player value for online sportsbooks is $1200 – $1800 over 2-3 years. That adds up to big profits. Flutter Entertainment, the owners of FanDuel, said it expected profits to increase by 34% this year. This tops growth of 26% last year, thanks in large part to the ever-expanding market of online sports betting for FanDuel in the US.
Seeking penalties
Fanduel and DraftKings are no strangers to legal proceedings. The pair faced similar accusations of unfair and deceptive practices in Massachusetts. This was prior to the legalizing of sports betting across the US, and they agreed to pay $1.3 million each to settle.
Baltimore may settle for a similar amount. The city stated they are “seeking civil penalties and injunctive relief to remedy defendants’ violations.”
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