DraftKings and FanDuel Liability Lawsuits: What You Need to Know

Medically reviewed by licensed healthcare professionals · Legally reviewed by mass tort litigation specialists · Last updated: March 2026

Multiple lawsuits filed against DraftKings, FanDuel, and other major sportsbook operators allege that their platforms were designed to exploit gambling addiction rather than prevent it — and that internal data showed them exactly who was being harmed.

The Core Allegations

Plaintiffs in these lawsuits allege that DraftKings and FanDuel:

• Used app design features specifically engineered to encourage continuous betting and prevent natural stopping points
• Identified users showing signs of problem gambling through internal data analytics and continued marketing to them aggressively
• Offered personalized bonuses and promotions to high-loss users ("VIP treatment") specifically to retain them on the platform
• Failed to implement self-exclusion tools that were meaningfully effective or prominently accessible
• Advertised products using messaging that minimized risk and normalized large-volume betting
• Allowed and facilitated underage access through inadequate age verification

The "Whale Targeting" Evidence

Among the most significant allegations is the internal use of "whale" designations — industry terminology for high-value customers who lose large amounts. Internal communications from discovery proceedings have described dedicated account management teams whose explicit purpose was retaining high-loss customers. Plaintiffs allege this constitutes predatory targeting: identifying the customers most harmed by the product and working specifically to prevent them from leaving.

App Design as a Liability Theory

Similar to the design defect liability theory used against social media platforms, UPF manufacturers, and tobacco companies, plaintiffs in sportsbook lawsuits argue that specific product design choices — quick-deposit flows, in-play betting with second-by-second decisions, immediate re-bet prompts after a loss, "suggested bets" based on behavioral data — constitute defective design when they are known to exacerbate addictive behavior.

Expert testimony on addictive app design principles, borrowed from research on social media and casino gaming, is expected to play a significant role in these cases.

The "Legal Doesn't Mean Unaccountable" Principle

A central defense from DraftKings and FanDuel is that their activities are legal, regulated, and conducted with state authorization. Plaintiffs' attorneys counter that legality and liability are separate questions — the tobacco industry was legal; asbestos manufacturers were legal; opioid distributors were licensed. Legal authorization does not immunize companies from liability for foreseeable harm caused by product design choices they controlled.

Current Litigation Status

As of early 2026, multiple individual lawsuits against DraftKings and FanDuel are pending in several federal and state courts. Class action consolidation motions have been filed in some jurisdictions. Discovery is ongoing in early-filed cases, and the document production phase has been contentious — platforms have resisted producing internal behavioral analytics data that plaintiffs allege is directly relevant to the liability theories.