FanDuel and DraftKings Sued: Lawsuit Alleges Apps Were Designed to Maximize Losses

FanDuel and DraftKings are being sued over claims that their sports betting apps were intentionally designed to keep users gambling and rack up losses.

Two New York residents, John Farley and Michael Fox, filed a proposed class action lawsuit on April 27, 2026 in the U.S. District Court for the Southern District of New York. The complaint names FanDuel, its parent companies Betfair Interactive US, FanDuel Group Parent, Flutter Entertainment, and DraftKings as defendants.

What the lawsuit alleges

According to the complaint, FanDuel and DraftKings turned sports betting from an occasional, event-based activity into a high-frequency product engineered for continuous wagering. Instead of placing one bet before a game and waiting for the result, users are allegedly funneled into placing repeated live, in-game bets — sometimes within seconds of a previous wager resolving.

The lawsuit claims the platforms reinforce this with a constant stream of time-sensitive promotions: profit boosts, bonus bets, money-back offers, cash-back deals, and bet refunds, delivered through email, text, push notifications, and in-app alerts. The complaint alleges these promotions are designed to create urgency and make additional betting feel less risky than it actually is.

The lawsuit also claims both companies use customer data, betting history, and behavioral patterns to identify users with escalating activity, then specifically target those users with promotions to extend their time on the platform and encourage loss-chasing.

The plaintiffs

Farley says he started using FanDuel when it launched in New York and deposited approximately $11,000 over four years, much of it on credit cards. He alleges a "$5 bet, get $300" introductory promo and a steady drip of cash-back deals, profit boosts, and money-back offers kept pulling him back in.

Fox says he primarily used DraftKings and lost approximately $5,000 in less than a year. The lawsuit claims his betting shifted from occasional wagering into loss-chasing, that he experienced significant anxiety and financial strain, and that he hid his sportsbook activity from his domestic partner. DraftKings allegedly sent him profit boosts advertising potential payout improvements of up to 50%, but his outcomes never improved.

Who's eligible

The plaintiffs are proposing two classes:

A nationwide class covering all U.S. account holders on FanDuel or DraftKings who encountered the alleged practices, and a New York subclass for users who used the platforms in the state.

The lawsuit seeks actual damages, statutory damages, treble damages, restitution, disgorgement of profits, and injunctive relief.

What happens next

There's no settlement yet. No claims process, no money available, and the defendants haven't filed formal responses. The allegations are unproven.

Download ClassyAction to stay updated on this lawsuit and get notified when the payout drops.