Antitrust Law Daily Wrap Up, ADVERTISING—E.D.N.Y.: Class action alleging deceptive conduct by online sportsbook dismissed, (Jul 30, 2025)

By Kenneth H. Ryesky, M.B.A., J.D.

There is a difference between the efficacies of a label on a tangible consumable product and disclosures on the Internet of explicit terms of a sales promotion.

The federal district court judge in Brooklyn, New York has dismissed a putative class action lawsuit alleging false advertising and deceptive practices by an online sports betting purveyor. DraftKings ran a promotion for new customers whereby the customer's account would be augmented by a "deposit bonus" of 20 percent, up to $1000. A New York consumer’s General Business Law claims failed under the reasonable consumer standard. A reasonable consumer would not be misled into believing that signing up for DraftsKings would entitle them to a $1,000 deposit bonus. The terms of the offer were fully and conspicuously disclosed on its Internet website and on its app, and a reasonable consumer would review them before proceeding (Aminov v. DraftKings, Inc., No. 1:24-cv-08472-MKB-LKE (E.D.N.Y. July 28, 2025)).

Background. The New York State Constitution had long carried an absolute prohibition on bookmaking or any other form of gambling, but an exception was carved out that enabled the legislature to authorize "pari-mutuel betting on horse races." In 1970, off-track betting operated by certain state governmental entities was authorized. With the advent and commercial expansion of the Internet, further exceptions to the anti-gambling provisions were instituted, leading up to the legalization of betting on athletic events at brick-and-mortar venues and online in January 2022. DraftKings, Inc. (DraftKings) was one of many entrepreneurs that facilitated online sports betting for New York residents.

In competing for customers, DraftKings ran a promotion for new customers whereby the customer's account would be augmented by a "deposit bonus" of 20 percent, to be used only towards bets placed on the DraftKings website, subject to (1) the customer depositing the requisite level of funds into his or her account, and (2) placing the requisite "play-through" wagers within 90 days of the first deposit. The total bonus was limited to $1,000 (on a total deposit of $5,000).

Aminov, claiming to have not known or understood the conditions of DraftKings's promotion, filed a putative class action lawsuit in New York state court, alleging violations of New York's General Business Law. After removing the action to federal court, DraftKings moved to have the complaint dismissed for failure to state a cause of action.

New York consumer statutes. The court found that the consumer did not state cognizable claims under the New York consumer statutes. Here, as commonly done in New York adjudications, the state deceptive practices and false advertising statutes were analyzed in tandem because they each are construed under the reasonable consumer standard. A reasonable consumer would not be misled into believing "that merely signing up for a DraftsKings account would entitle them to the full $1,000 deposit bonus when the Promotional Terms specified that users can “receive up to $1,000 in bonus funds [emphasis in original]." The terms of the DraftKings promotional offer were fully and conspicuously disclosed on its Internet website and on its app, and a reasonable consumer would review them before proceeding.

Moreover, each of the New York consumer statutes here have a territorial requirement; each is qualified by the prepositional phrase "in this state," which must be pleaded. Here, the complaint was devoid of any allegation that any relevant activity occurred within the State of New York; Aminov's pleading that he is a New York resident and that DraftKings's advertisements and promotions of its services were availed within the state of New York did not suffice to plead the territoriality requisite.

The Case is No. 1:24-cv-08472-MKB-LKE.

Judge: Brodie, M.

Attorneys: Andrew Shamis (Shamis & Gentile P.A.) for Nerye Aminov. Richard Ralph Patch (Coblentz Patch Duffy & Bass) and Alan E. Schoenfeld (Wilmer Cutler Pickering Hale and Dorr LLP) for DraftKings Inc.

Companies: DraftKings Inc.

Cases: Advertising StateUnfairTradePractices NewYorkNews