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DraftKings is facing a proposed class action in Massachusetts that alleges its DraftKings Predictions product offered illegal sports betting under the label of event contracts.
According to the complaint, filed in the U.S. District Court for the District of Massachusetts on behalf of California resident Michael Chan, users were misled into believing the product was lawful. The suit argues that DraftKings’ sports “predictions” are effectively sports bets presented as trading contracts and says the app operated like an unlicensed sportsbook.
The filing also claims DraftKings Predictions offered sports bets identical to those available on the company’s regulated online betting platform. It further alleges that 70% of the product’s sports event contracts came from U.S. states where sports betting is illegal, including California, Florida, Georgia, Alabama, Minnesota, and Texas.
The case seeks damages on behalf of players from multiple states. One of the central allegations in the complaint states: “DraftKings’ sports ‘predictions’ are sports bets masquerading as event contracts. By branding the product as ‘trading’ rather than betting, DraftKings misleads consumers into believing the activity is lawful and safe.”
DraftKings disputed the claims. In a statement cited by the source report, a company spokesperson said: “DraftKings’ prediction markets offering operates in accordance with applicable law and the federal regulatory framework established under the Commodity Exchange Act. We remain confident in our legal position.”
For players, the case is worth watching because it centers on how a prediction-markets product is classified and marketed, not just on a dispute over a single wager. The lawsuit does not establish liability, and the court still has to determine how the case proceeds, including whether the proposed class action moves forward.
What comes next is likely to matter more than the initial filing. Key open questions include which state gambling laws are alleged to have been breached in detail, whether the class will be certified, and whether any regulatory action follows beyond this private lawsuit.
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Source: As reported by Alla Basentsyan.
