DraftKings Faces Allegations of Account Closures and Retention of Funds.
A class action lawsuit filed on Monday alleges that DraftKings Inc., an online sports betting company, has unlawfully closed users' accounts and misappropriated their remaining balances. According to the complaint submitted to the US District Court for the District of Massachusetts, Texas resident Eric Avila had his account deactivated in August 2024 while holding a balance of $100.
The complaint states that DraftKings users maintain funds in their accounts to support their betting activities, which may originate from personal bank accounts, winnings, or promotional incentives provided by the company. Avila contends that DraftKings terminated his account under the misleading assertion that he had violated the company's terms of service by creating multiple accounts. He claims that when he sought clarification regarding the closure from customer service, he was unable to retrieve his funds, resulting in a "catch-22 situation."
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The complaint highlights that "Users cannot withdraw funds from their DraftKings account because DraftKings has decided the users do not have a DraftKings account." Avila believes this practice has led to DraftKings retaining millions of dollars that rightfully belong to users. He aims to form a class that could represent thousands of individuals who have been denied access to their closed accounts and the ability to withdraw their balances. Avila asserts that the company has breached its contract with users by obstructing their ability to withdraw funds at any time and has violated Texas consumer protection laws.
The complaint notes that DraftKings requires disputes to be resolved in Massachusetts. Avila is represented by Quat Law Offices and Waldo Gubernick Law Advocates LLP. DraftKings has not yet provided a response to the request for comment.
The case is identified as Avila v. DraftKings, Inc., D. Mass., No. 1:24-cv-13165, with the complaint filed on December 23, 2024. Online betting platforms face increasing scrutiny over their practices, including allegations of unfair account closures and withholding user funds. Legal challenges, like the recent class action against DraftKings, highlight concerns about transparency, consumer protections, and compliance with regulations. As the industry grows, stricter oversight may be necessary to safeguard users.
