DraftKings Will Pay Out $8 Million To Settle Class Action Lawsuits
DraftKings, an American sports betting company, will pay $8 million to resolve multiple class action lawsuits filed against them.
Plaintiffs Allegations and Class Action Lawsuits
Various class action lawsuits have been charged against DraftKings Inc. and FanDuel Inc.
Among the lawsuits, plaintiffs assert that its users cannot easily understand the companies’ terms and conditions since some information is not clear.
Plaintiffs argue that the companies knowingly concealed some information in the terms and conditions by designing the website so that consumers would not be enticed to read it and would not know what they have agreed to.
Another class action lawsuit states that the companies deceive their users that they can easily win.
However, plaintiffs allege that players are not given an equal chance and that only a few selected elite players only win.
In February 2016, The numerous class action lawsuits filed against DraftKings and FanDuel were combined into one multidistrict litigation in a federal court in Massachusetts.
DraftKings has not acknowledged any of the allegations charged against them. Nonetheless, the company has agreed to pay a settlement amounting to $8 million to compensate affected class members and stop any further litigation.
It is estimated that a total number of 3.15 million individuals are eligible to apply as class members for the DraftKings lawsuits. Meanwhile, class members for FanDuel have not been finalized.
According to the settlement terms, the settlement fund will be divided into two.
The first part will cover most of the total fund, amounting to $7.28 million. This compensation will come in the form of “DK dollars,” the online virtual currency used in DraftKings’ platform.
The amount will be credited into the existing account of affected DraftKings users.
The second fund is equal to $720,000, which will be paid to eligible class members who have already closed their DraftKings accounts. The amount will be given in cash to affected individuals.
Aside from monetary compensation, the settlement terms also require DraftKings to change their existing policies and website.
Some of the changes to be implemented by DraftKings regarding the daily fantasy sports contests are:
- Players will be allowed to opt-out from joining the daily fantasy sports contests
- Users will have the ability to set ceiling values on their funds
- Players will only have one active account at a time
Class Members Eligibility
Individuals who meet the following conditions are eligible class members to be compensated by DraftKings:
- Individuals residing in the United States who have a DraftKings Daily Fantasy Sports account
- The user has conducted a first-time deposit into the account before January 1, 2018.
- The user has not been a net lifetime winner until 48 hours before the execution date.
DraftKings will decide which users are considered lifetime winners. The execution date has not yet been determined.
DraftKings will divide class members into eight levels, based on the amount the user has initially deposited into their DraftKings’ account.
Eligible class members will receive compensation amounting to 1.75 times their initial deposit.
The maximum amount that each class member can get is $1,050. This amount applies to both cash and DK dollars compensation.
Editor’s Note on DraftKings Class Action Settlement Details:
This article is published to inform you of the latest settlement to be paid by DraftKings to resolve class action lawsuits filed against them.
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