Lawyer in $206 Billion Tobacco Settlement Taking Aim at DraftKings  

The lawyer who pioneered the strategy used to win a $206 billion settlement against Big Tobacco is coming after online sports betting companies.

Richard Daynard, who teaches at Northeastern University, said that there are glaring similarities between marketing strategies employed by sports betting operators and tobacco companies. Following his lead, The Public Health Advocacy Institute, at which Daynard serves as president, filed a lawsuit against DraftKings in Massachusetts last Friday. 

The suit disputes “unfair and deceptive” practices used during sign-up promotions that, in certain cases, have also drawn the ire of lawmakers and regulators nationwide.

The suit directly calls into question a $1,000 new-user bonus advertised when legal sports betting first arrived in Massachusetts near the start of the year. 

According to the dispute, sports bettors were made to believe that they would win a $1,000 prize essentially just for creating a DraftKings account. However, they needed to create an account, deposit at least $5,000, and bet $25,000 on betting lines with odds of -300 or longer within their three months on the sportsbook to claim the prize.

Daynard and co. said the campaign “confuse[d] and [misled] consumers” and “induce[d] repeated exposure to a known addictive product.” 

“[Online sports betting is] creating a public health disaster with increasingly addictive products right before our eyes,” Daynard said in a statement. “Massive advertising using unfair and deceptive promotions to hook customers on an addictive product bears an uncanny similarity to what the cigarette companies used to get away with.” 

Daynard’s contributions to the fight against Big Tobacco revealed the strategic use of language to shift public perception and influence legal policy. He also helped create more transparency in these companies after bringing light to a variety of tactics they used to get their products in front of consumers. 

DraftKings said in a statement that it will contend the accusations made in the lawsuit. 

“Regrettably, the institute ignored our multiple attempts to engage in an in-person dialogue to carefully examine their concerns and, instead, filed suit,” said the statement. “DraftKings intends to vigorously defend this lawsuit.”

Sports betting has resulted in more than $220 billion in wagers since the industry was legalized nationwide in 2018.

38 of 50 states have legalized sports betting locally, and the market is expected to generate $8.5 billion in gross gaming revenue nationwide by the end of the year, per gaming research company Eilers & Krejcik Gaming.

Pro-gambling lawmakers argue that the economic boost from sports betting allows them to address and improve areas such as education, healthcare, and public infrastructure. Many states also mandate a portion of proceeds from sports betting go to programs used to identify and address problem gambling behaviors to counteract negative attitudes developed during sports betting. 

However, many critics, research and advocacy groups, and therapists have argued that those measures are not enough to counteract the addictive personality traits and financial losses incurred by many gamblers, specifically young adult men. 

Daynard feels that sports betting companies and lobbyists have largely controlled the conversation around gambling up to this point.

“There’s been a monologue from the industry,” Daynard said to the Financial Times. “We want to change that, we want to make it a dialogue.”

Daynard said that before his campaign against the tobacco industry, there was a perception that the industry was too rich and powerful to lose a suit. By the end of that saga in the 1980s, four tobacco companies paid $206 billion to 46 states for covering up the link between smoking and lung cancer.

DraftKings recently revealed a new line of products, including “Pick6,” a new fantasy-style competition where users compete against the player-base, and “Progressive Parlays,” which introduce a new pay-scale for parlays.

DraftKings is hoping the case will be dismissed.