A new class-action lawsuit filed in federal court is challenging the legality of the way DraftKings implements betting limits and responsible gambling protections across multiple U.S. states. The complaint, brought on December 30 in the U.S. District Court for the Eastern District of Michigan by Michigan resident Michael Koester, claims the platform enabled users to immediately raise their spending caps without observing mandatory cooling-off periods required under state internet gambling statutes. The plaintiff argues that these platform design choices violated statutory consumer protection frameworks and contributed to substantial gambling losses during a two-year period.

Suit Outlines Multi-State Regulatory Allegations

Koester’s complaint describes alleged breaches not only in Michigan but in Colorado, Connecticut, Indiana, Iowa, Louisiana, and New York. Each of these jurisdictions requires users to set spending limits and, according to the filing, mandates a 24-hour waiting period before increases can take effect. The lawsuit asserts that DraftKings allowed Koester to repeatedly raise his limits without delay between 2022 and 2023, enabling him to deposit more than US$25,000 and wager without the statutory cooling interval. It states that Koester “would have been able to delay the gambling impulse and avoid falling into a destructive gambling cycle which caused him significant harm” had the cooling period been enforced, Complete iGaming reports.

Court records cited in the filing show Koester opened his account in late 2021 and set initial limits on December 31 of that year. Over the next two years, he increased those limits multiple times. The complaint further asserts that DraftKings accepted deposits and wagers during periods when its platform was legally required to block or delay such transactions until the regulatory cooling period elapsed.

The lawsuit seeks to represent a class of DraftKings users in the seven listed states who allegedly faced the same lack of cooling-off enforcement. The motion asserts that the legal question stems from statutory interpretation rather than contested facts, and requests summary judgment ahead of class certification.

Legal Theories and Regulatory Interpretations

The case centers on how state rules define changes to self-imposed player restrictions. Michigan’s rule states that players may only “reduce the severity” of such restrictions after providing 24 hours’ notice. Koester’s legal team argues that increasing limits constitutes a reduction in the severity of limits and should trigger the same waiting period. DraftKings appears to interpret the rule differently, enabling increases after a prior restriction period lapses without imposing an additional delay.

To support its reading of the statute, the complaint references competitor practices. It notes that FanDuel and BetMGM require three-day waiting periods before limit increases activate, while Michigan tribal casinos also enforce cooling-off protocols. The filing highlights Michigan’s 2020 regulatory process, during which officials considered Indiana’s stricter model and New Jersey’s more permissive approach. According to the motion, Michigan adopted the Indiana model, demonstrating intent to impose waiting periods for increases.

Before filing suit, Koester contacted DraftKings’ customer service unit and the Michigan Gaming Control Board. The regulator opened an investigation but did not pursue enforcement. Koester argues that regulatory inaction does not preclude private claims and points to the 2025 Michigan Supreme Court decision in Davis v. BetMGM, which held that the state’s internet gaming law does not limit players solely to administrative remedies.

The case adds to a growing list of disputes involving DraftKings’ platform design, payment processing, promotional disclosures, and reporting accuracy. The operator is defending a separate Iowa lawsuit over an alleged US$14 million payout refusal stemming from a golf tournament affected by weather. Municipal consumer protection litigation has also emerged, including claims brought by the city of Baltimore. DraftKings has faced enforcement actions in Massachusetts, Connecticut, and New Jersey related to credit card wagering, bonus terms, and reporting violations.

Legal observers view the Koester case as targeting a different dimension of responsible gambling compliance. Instead of focusing on promotions or disclosures, the suit examines how sportsbooks operationalize limit-setting and whether failure to enforce cooling periods renders certain wagers unlawful. The complaint asserts that if the court agrees with its interpretation, operators could face refund exposure, treble damages, and federal electronic fund transfer liability.

With only a single plaintiff, the motion seeks to resolve statutory interpretation before class certification. A ruling could influence industry practices across multiple states and determine when online sportsbooks may legally accept wagers relative to consumer protection safeguards.