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DraftKings has been hit with a lawsuit accusing the betting company of violating betting laws in seven different states. The multi-state class action lawsuit is led by Michigan-based Michael Koester, who claims DraftKings allows players to increase gambling limits, circumventing state law.
This type of law is implemented in Michigan, Colorado, Connecticut, Indiana, Iowa, Louisiana, and New York. However, according to court documents reviewed by ReadWrite, Koester alleges that DraftKings allows users to circumvent this problem without a waiting period before taking action.
Koester claims to know this information because he obtained it himself. According to the lawsuit, Koester has been a DraftKings user since 2021, with a spending limit implemented on December 31 of that year. Over the following year, he repeatedly circumvented this limit without being subject to the usually prescribed cooling-off period.
“The simple meaning of this regulation is clear: once a customer establishes responsible gaming limits (deposit, spend, time, bet amount), there must be a waiting period of at least 24 hours after the customer requests an increase in their self-imposed limits before that request can take effect.”
Koester also did not immediately jump into the lawsuit. He reportedly contacted DraftKings customer service and the Michigan Gaming Control Board, both of which ended their investigations.
Under the law of these seven states, DraftKings should have imposed a waiting period before higher betting limits could go into effect.
DraftKings interprets the law a little differently
However, DraftKings doesn’t see it that way. Instead, the betting app company says the restrictions can only be bypassed if they expire.
If the case is won, Initiated to the game reports that the case could expose DraftKings to large-scale refund demands. DraftKings will likely fight this one hard, as it would expose them to refunds and other federal issues.
In Connecticut, DraftKings has already had to return more than $3 million to thousands of customers after regulators ruled some of its bonus offers violated state gaming and advertising rules. On top of that, a few class-action lawsuits over misleading registration and so-called “risk-free” bonuses are still pending after judges refused to dismiss them.
In April 2025, DraftKings was the subject of another class action lawsuit, which took it to task for “risk free” promotions. Massachusetts hit them with a $450,000 fine for credit card betting in August.
ReadWrite has contacted DraftKings for comment on the lawsuit.
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The position DraftKings faces seven statewide class action lawsuits over gambling limits appeared first on ReadWrite.
