DraftKings, the popular Boston-based sports betting operator, has settled with the Connecticut Department of Consumer Protection (DCP) following an investigation into the company’s promotional practices. The settlement, announced on Thursday, requires DraftKings to return over $3 million to approximately 7,000 consumers in Connecticut. These customers had participated in bonus offers between October 2021 and January 2023, which allegedly did not fully disclose wagering requirements tied to the bonuses.

Refunds to Connecticut patrons:

The DCP’s investigation was sparked by consumer complaints about unclear terms in DraftKings’ marketing materials. The company reportedly offered bonus deposits and bets with wagering conditions that were not adequately communicated to players, potentially misleading consumers about the actual cost of the promotions. While DraftKings denies any wrongdoing, the company agreed to settle the matter without admitting fault, as outlined in the Assurance of Voluntary Compliance.

As part of the settlement, DraftKings has agreed to refund $3.012 million to Connecticut players who participated in the problematic promotions. This includes customers who took part in deposit match offers or “free” wagers between October 2021 and January 2023. Customers with active accounts will receive direct credits, while those without accounts will be issued checks to the last known address.

The company must notify affected players via email within 60 business days of the settlement’s finalization. If any checks go uncashed, DraftKings will have a one-year period to reissue them to the rightful recipients. After six months, the company is also required to notify the DCP about any unclaimed payments, as part of its commitment to ensuring consumers are properly compensated.

Enhanced marketing transparency and compliance measures:

In addition to the refunds, DraftKings has agreed to implement stronger transparency measures in its future marketing campaigns. This includes clearly disclosing all playthrough requirements in its promotional offers, especially those involving “free” bets or bonuses. The company must now avoid using terms like “free” or “risk-free” unless the promotion truly meets those criteria, and it must fully explain all conditions related to the bonus.

As stated in the settlement (pdf), DraftKings will also promote its “Casino Education Hub,” a resource for new users, and offer tutorials that explain how to use casino deposit bonuses. These changes are designed to prevent future confusion among players and to provide more accessible information regarding the terms of promotional offers.

Furthermore, the company will provide annual training on Connecticut’s advertising and marketing regulations for its employees handling state promotions. This will help ensure that all personnel are well-versed in the state’s legal requirements and maintain the highest standards of transparency when promoting gambling products.

While DraftKings has faced numerous legal challenges related to its promotional practices, including lawsuits in other states, the company has reaffirmed its commitment to complying with regulatory standards. A company spokesperson emphasized that DraftKings values its relationship with the Connecticut Department of Consumer Protection and will continue to cooperate fully to prevent further issues.

“We are committed to compliance with all regulatory requirements,” the spokesperson stated. “We value our relationship with the Connecticut Department of Consumer Protection and will continue to work collaboratively with them.”

DraftKings’ bonus-related issues are not unique, as other operators in the online gambling space have also faced increasing scrutiny over unclear bonus terms. The DCP’s action against DraftKings follows similar cases in other states, highlighting a growing concern over the transparency of online gambling promotions. This is part of a wider trend of regulators pushing for clearer, more upfront communication with consumers about the true costs of promotions, particularly in areas like playthrough requirements and wagering conditions.