In a story first reported by David O. Klein at Mondaq, FanDuel had a class action lawsuit filed against them in the State of Florida (Southern District of Florida) on November 20th for alleged False advertisement. The FanDuel lawsuit centers on the accusation that FanDuel claims in their commercial advertisements to match dollar for dollar the initial deposit made by a first time user. This “free” dollar for dollar bonus promotion is valid up to $200. But and as the lawsuit points out it is not cleared or given in a 1 to 1 relationship with amounts deposited or wagered. The bonus must be cleared at a rate of $25 wagered for every $1 bonus amount released. This is the crux of the lawsuit filed against FanDuel and the reason for the false advertisement claim. From Mondaq.
The class action complaint filed against FanDuel alleges violations of Florida statutory and common law. Specifically, the Florida Deceptive and Unfair Trade Practices Act (“FDUTPA”) prohibits any person or business from advertising free goods or services that actually require payment to receive the subject goods or services. According to the complaint, FanDuel’s services are “free” under the FDUTPA because FanDuel “offer[s] to match initial deposits, ‘dollar for dollar.'” The plaintiff alleges that FanDuel’s advertisement violates the FDUTPA and that its associated matching practices also constitute a breach of contract. The plaintiff seeks to certify a class of “[a]ll Florida Citizens who purchased FanDuel, using a Promotion Code.”
Industry insiders have for a long time bemoaned this marketing strategy by FanDuel. It is clear to any close observer that FanDuel does not match dollar for dollar an initial deposit along the lines of their advertising. It seemed to be only a matter of time before somebody who was frustrated with FanDuel would submit a lawsuit along these very lines. It is most likely that FanDuel will be able to have this lawsuit dismissed under terms that they are not a free service. But this lawsuit should cause FanDuel to rethink and restructure their advertising and marketing campaigns. Hopefully they can come up with new and innovative ways to promote the daily fantasy sports industry to an untapped audience without going down the slippery slope of saying they match dollar for dollar deposits when they so clearly do not actually do that.