The City of Baltimore has initiated a groundbreaking lawsuit against the sports betting giants DraftKings and FanDuel. Filed in the Baltimore City Circuit Court on Thursday, April 3, 2025, the legal action accuses the two prominent sportsbooks of employing deceptive tactics that purportedly target and exploit susceptible gamblers, as outlined in the city’s Consumer Protection Ordinance.

Hooked on habits: the role of VIP programs and data analytics:

Baltimore Mayor Brandon Scott vehemently criticized the sportsbooks’ operations. “These companies are engaging in shady practices, and the people of our city are literally paying the price,” Mayor Scott asserted, as reported by ESPN. “DraftKings and FanDuel have specifically targeted our most vulnerable residents — including those struggling with gambling disorders — and have caused significant harm as a result. This lawsuit is a critical step to hold them accountable and protect all Baltimoreans.”

The legal complaint details how DraftKings and FanDuel lure new users with enticing “bonus bets”—monetary credits that are valid only at their sportsbooks and often expire within a week of registration. This strategy, the city argues, is designed to hook bettors into frequent and substantial betting right from the start. According to the lawsuit, these practices not only perpetuate gambling but are intended to make individuals repeatedly bet large amounts, with some users becoming addicted.

Furthermore, the lawsuit accuses the sportsbooks of utilizing sophisticated data analytics to pinpoint bettors likely to gamble more frequently. Both sportsbooks are alleged to enroll these individuals in VIP programs, where they receive personalized attention and exclusive offers, encouraging them to continue betting heavily.

A call for ethical practices and legal oversight:

Despite opportunities to use their data to help problem gamblers, the lawsuit contends that DraftKings and FanDuel have instead chosen to capitalize on this information for profit. “DraftKings and FanDuel could leverage their troves of user data for good if they wanted to,” the lawsuit states, highlighting the companies’ potential to identify and assist those at risk of gambling addiction rather than exploiting them.

The city’s legal representatives argue that while these practices are well-known within the industry, the companies have failed to implement safeguards akin to those established in the UK, such as financial vulnerability checks and stricter regulations for younger bettors.

Baltimore’s legal action is notable as it marks the first time a U.S. city has directly taken such a stand against online sportsbooks since the Supreme Court’s 2018 decision to allow states to legalize sports betting. Adam Levitt, founding partner at DiCello Levitt, the law firm representing the city, emphasized the unique position of public entities in these cases. “Public entities can bring claims to protect their citizens for this type of wrongdoing,” he noted, explaining that unlike individual bettors, cities are not bound by arbitration clauses that typically prevent class-action lawsuits.

The filing demands both civil penalties for each deceptive act under the city’s consumer laws and injunctive relief to halt the alleged exploitative practices. Baltimore also seeks reforms that would require the sportsbooks to overhaul their operational tactics significantly.

As Maryland’s sports betting market continues to grow, with over $5.4 billion wagered in the fiscal year 2024 alone, the outcome of this lawsuit could set a significant precedent in consumer protection and responsible gambling practices across the nation.