Products Liability Law Daily Wrap Up, DESIGN AND MANUFACTURING DEFECTS—ELECTRONIC PRODUCTS—E.D. Pa.: Products liability suit against online sports betting company DraftKings dismissed, (Mar 27, 2026)

By Nicholas Kaster, J.D.

The court noted that no Pennsylvania state court or federal court has found a website or application to be a product subject to liability.

A federal district court in Pennsylvania has dismissed a products liability action filed by a group of gamblers against online sports betting company DraftKings and its subsidiaries. The court held that DraftKings had no duty of care toward the claimants and that the DraftKings App and promotions did not comprise a single product (Macek v. DraftKings, Inc., No. 5:25-cv-1995 (E.D. Pa. Mar. 23, 2026)).

Background. A group of gamblers sued online gambling company DraftKings and its subsidiaries alleging that the company caused or aggravated their gambling addictions by continually sending promotions and targeting vulnerable persons. The claimants alleged that DraftKings engaged in a variety of tactics designed to inculcate gambling addiction and extract as much money as possible from users.

DraftKings’ mobile phone application engages users through “visual displays, sounds, and haptic feedback.” Users can wager on the outcome of individual sports plays and can string these bets together into multi-leg bets. DraftKings serves rapid fire updates for ongoing bets—with scores and odds refreshing fast and serving users precisely timed “pop-ups” in bright colors and with emojis. When a user places a bet, whether it is successful or not, “celebratory animations and pop-ups” appear. Once a user links a bank account or credit card, users can bet directly from their checking account or on credit. When DraftKings’ data indicates a user has the potential to gamble significant amounts of money in the App, users can receive a VIP Host. The claimants alleged that the VIP Hosts foster close relationships with users and encourage them to gamble. VIP Hosts regularly offer users promotions or site credit.

The claimants alleged that DraftKings’ practices caused them to become addicted to gambling. They claimed that they tried to stop betting, but DraftKings would entice them back with new promotions. The claimants alleged that they developed “severe mental illnesses,” including anxiety, panic disorders, “distorted perception of money,” suicidal thoughts, PTSD, insomnia, and “loss of family and business.”

Product liability claims. The claimants brought a number of claims, including actions for strict products liability design defect and failure to warn. The claimants alleged that DraftKings’ App and promotions are either a single product, or the promotions and features are individual products. They argued that DraftKings’ products, including the promotions and its app, failed to meet ordinary consumers’ expectations regarding the propensity of its product to cause addiction when used in an intended or reasonably foreseeable manner. They alleged that DraftKings’ App and promotions are defectively designed “because they create an inherent risk of danger of addiction, compulsive use, and serious financial, professional, personal, and emotional consequences in its users.”

The claimants also charged that DraftKings failed to warn them of the risks of gambling and they provided preferred warnings.

Additionally, the claimants asserted negligent products liability design defect and failure to warn claims. They argued that “DraftKings owed a duty to all reasonably foreseeable users of its products to design products that were reasonably safe.” In addition, they contended that “DraftKings owed a duty to all reasonably foreseeable users to provide adequate warnings about the risk of using its products that were known to it, or that it should have known through the exercise of reasonable care.”

DraftKings moved to dismiss the suit.

Strict products liability. The Supreme Court of Pennsylvania has adopted the doctrine of strict products liability as set forth in section 402A of the Second Restatement of Torts. Section 402A provides that: (1) One who sells any product in a defective condition unreasonably dangerous to the user or the consumer or to his property is subject to liability for physical harm thereby caused to the ultimate user or consumer, or to his property, if: (a) The seller is engaged in the business of selling such product, and (b) It is expected to and does reach the consumer without substantial change in the condition in which it is sold. To be liable for strict liability in Pennsylvania, one must be a “seller.” In general, Pennsylvania courts “expansively” interpret the term “seller.” Yet, generally, the word “seller” must still involve the transfer of possession of the subject product. To prevail on a strict liability design defect claim, a plaintiff must prove: (1) that the product was defective, (2) that the defect existed when it left the hands of the defendant, and (3) that the defect caused the harm.

The court noted that no Pennsylvania state court or federal court has found a website or application to be a product subject to liability. The court noted that the Western District of Pennsylvania has previously found that a technological process is not a product. The Western District found that a product must be a finished item with a tangible form, and that “mere ideas, information, communications, and drawings” are not products. The Pennsylvania Superior Court also held that a book is not a product subject to strict products liability. To the extent DraftKings’ App and promotions do not have a tangible form, this law “supports the prediction that the Pennsylvania Supreme Court would not find that they comprise a single product,” the court stated.

The claimants asked the court to analogize the DraftKings App and promotions to electricity, which Pennsylvania courts have held is a product once it passes through a customer’s meter. The distribution might well be a service, but the electricity itself, in the contemplation of the ordinary user, is a consumable product. However, said the court, unlike electricity, the DraftKings App and promotions cannot be “confined” and do not present a “consumable product.” The court thus declined to accept the claimants’ analogy.

Although based under New Jersey law, the Third Circuit has also declined to find that an algorithm is a product subject to liability. The Third Circuit held that, under New Jersey law, an application’s algorithm is not a product because it is not tangible. While the Third Circuit noted that the algorithm was not commercially distributed, and the DraftKings App and promotions are commercially distributed, the court found the Third Circuit’s holding persuasive.

Based on the foregoing, the court predicted that the Pennsylvania Supreme Court would not find that the DraftKings App and promotions are a single product. Pennsylvania courts “will not favor a broad definition of the word ‘product,’” said the court. Pennsylvania’s General Assembly has extensively regulated online gambling but has not ever established that a website, or its functionalities, comprise a single product. The court, sitting in diversity, previously declined to expand the scope of Pennsylvania tort law without guidance from Pennsylvania’s General Assembly or courts. Although it is likely that questions relating to software functionalities will become more prevalent, the court said that would not answer those questions in a manner that expands Pennsylvania state tort law. In light of the court’s finding that the DraftKings App and promotions do not comprise a single product, it held that all of the products liability claims were subject to dismissal.

Negligent products liability. To prevail in a negligent design action, a plaintiff must show that the defendant had a duty to conform to a certain standard of conduct, that the defendant breached that duty, that such breach caused the injury in question, and actual loss or damage.

The court found that, even if the claimants alleged that the DraftKings App and promotions constituted a single product, their negligent products liability claim would fail. Regarding the negligent products liability claims, said the court, whether to create a duty of care for online sportsbooks to design their interfaces differently to prevent plaintiffs from gambling compulsively is best left to the Pennsylvania General Assembly. The court previously found that casinos have no duty toward compulsive gamblers. Because no court applying Pennsylvania law has applied negligent products liability to gambling platforms, the court here declined to do so.

Failure to warn. A supplier is liable for negligent failure to warn if the supplier: (a) knows or has reason to know that the chattel is or is likely to be dangerous for the use for which it is supplied, (b) has no reason to believe that those for whose use the chattel is supplied will realize its dangerous condition, and (c) fails to exercise reasonable care to inform them of its dangerous condition or of the facts which make it likely to be dangerous. A plaintiff must allege facts sufficient to plausibly show that the defendant failed to exercise reasonable care to inform those for whose use the product is supplied of the facts that make it likely to be dangerous. Negligent failure to warn claims are viable where the “complaints contained factual allegations as to the content of the warnings the defendants should have provided.”

The court found that, even if the claimants plausibly pleaded that the DraftKings App and promotions constituted a single product, they failed to plausibly plead that DraftKings failed to warn them of the risks of gambling. Rather, the claimants conceded that DraftKings provides a “responsible gaming” page with numerous resources for potential compulsive gamblers. Their only argument was that the page was “lip service” to compulsive gamblers. The court held that this allegation was conclusory and thus failed to state a claim. The claimants did not specify what information DraftKings provided on the “responsible gambling” page, what information was missing from the page, or how and why the warnings were inadequate for potential compulsive gamblers. The claimants thus failed to state a failure to warn claim, in either negligence or strict liability.

Accordingly, the court granted DraftKings’ motion to dismiss the suit. The court found that DraftKings had no duty of care toward the claimants and that the DraftKings App and promotions did not comprise a single product.

The case is No. 5:25-cv-1995.

Judge: Leeson, J.

Attorneys: Aaron Tucek (Loevy + Loevy) for Kenneth Macek, Matthew Harner, Avi Setton, Lionel Alicea, Shane Spencer and Rangaraj Sadagopan. Nia Joyner (Coblentz Patch Duffy & Bass LLP) for DraftKings, Inc., Crown PA Gaming, Inc. d/b/a DraftKings and Golden Nugget Online Gaming, LLC.

Companies: DraftKings, Inc.; Crown PA Gaming, Inc. d/b/a DraftKings; Golden Nugget Online Gaming, LLC

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