DraftKings Sued Over Account Closures and Withheld Funds

DraftKings Inc., a major player in online sports betting, is under fire following the filing of a class action lawsuit on December 23, 2024. The suit, brought by Texas resident Eric Avila, accuses the company of unjustly deactivating user accounts and retaining the funds within them. Filed in the US District Court for the District of Massachusetts, the case sheds light on what Avila claims is a widespread issue affecting thousands of users.

Class action targets DraftKings for alleged fraud:

Avila alleges that his DraftKings account, containing a balance of $100, was deactivated in August 2024 under the pretense of violating the company’s terms of service. DraftKings reportedly claimed he had opened multiple accounts, a breach of their policies. However, Avila asserts that this accusation was unfounded and resulted in his inability to access his funds.

The lawsuit details the predicament faced by Avila and potentially many others. According to the complaint, users rely on their accounts to store funds sourced from bank deposits, betting winnings, or promotional bonuses offered by DraftKings. These funds are used to support ongoing wagers.

The filing describes a “catch-22 situation” where users are unable to withdraw their funds because DraftKings has decided they no longer have an account. According to Bloomberg Law, the complaint states: “Users cannot withdraw funds from their DraftKings account because DraftKings has decided the users do not have a DraftKings account.” Avila believes that this practice has allowed the company to hold on to millions of dollars that rightfully belong to its users.

In the complaint, Avila argues that DraftKings’ actions amount to a breach of contract, violating its obligation to allow users access to their funds at any time. He also accuses the company of violating Texas consumer protection laws.

Class action seeks accountability:

Avila aims to form a class comprising potentially thousands of individuals who have experienced similar account closures and the inability to retrieve their funds. If successful, this class action could significantly impact DraftKings’ operations and highlight concerns about the practices of online betting platforms.

The Massachusetts-based company requires disputes to be resolved in its home state, as stated in its terms of service. As Lawyer Monthly reports, Avila has engaged Quat Law Offices and Waldo Gubernick Law Advocates LLP to represent him in the case.

The lawsuit, identified as Avila v. DraftKings, Inc., D. Mass., No. 1:24-cv-13165, has not yet elicited a response from DraftKings.

The legal action against DraftKings underscores growing concerns about transparency and consumer protection in the online betting industry. Allegations of unfair account closures and withheld funds have drawn increasing attention, with critics calling for stricter oversight of betting platforms.