Lawsuits Target FanDuel and DraftKings Over Addictive Design

As regulatory scrutiny intensifies for Big Tech, Florida attorney Jennifer Hoekstra has turned her attention to the sports gambling sector. Following Meta’s recent $17.1 billion settlement regarding social media addiction, Hoekstra filed a series of 15 lawsuits against FanDuel and DraftKings, the two dominant players in the U.S. sports betting market.

The litigation alleges that these platforms are intentionally designed to foster addiction. Hoekstra, whose firm previously assisted in the Meta case, told CBS News that the mechanisms used by gambling apps mirror those of social media. She represents clients who have suffered severe financial ruin, including the loss of homes and families, citing similar notification workflows and addictive design patterns.

The legal challenges emerge during a period of rapid expansion for online sports gambling. According to the American Gaming Association, wagers reached $167 billion last year. However, research highlights a growing financial toll: a UCLA study published earlier this year found that states permitting online sports gambling saw a 25% increase in bankruptcies and credit card delinquencies. Additionally, a National Council on Problem Gambling survey indicated that approximately 20 million American adults reported frequent problematic gambling behaviors over the past year.

Both FanDuel and DraftKings strongly deny the allegations. FanDuel, which serves roughly 18 million customers, stated that claims of inaction regarding problem behavior are false. The company reported investing $158 million in responsible gaming initiatives last year and removing 5,700 individuals from the platform due to harmful gambling habits. A DraftKings spokesperson emphasized that responsible engagement is trained annually across all employee levels and noted the company’s unique position with a Chief Responsible Gaming Officer reporting directly to the CEO.

Despite these corporate defenses, a CBS News investigation revealed that gambling companies employ aggressive tactics to maintain user engagement. A former FanDuel employee, speaking anonymously, described a culture where monitoring data collection was highly sophisticated but enforcement of limits was often deprioritized. The insider noted that staff would sometimes overlook excessive betting to avoid interrupting revenue streams.

“It’s less about cutting them off than slowing them down,” the former employee said. “It’s never forever.”

The industry also mirrors traditional casino strategies through VIP programs. High-volume bettors are offered luxury experiences, such as suite access at professional games and autographed memorabilia. Esteban Ruiz-Haynes, a pest control salesman from Virginia, reported betting between $80,000 and $120,000 annually—roughly equivalent to his yearly income. He described receiving personalized texts from a dedicated FanDuel manager and wagering his weekly paycheck on single games.

For some users, these incentives exacerbate addiction rather than mitigate it. Louis Ruggiero, a podcaster and recovering gambler, lost $100,000 on FanDuel in three months only to be offered VIP status. “From that moment forward, I wasn’t just a customer, I was a target,” Ruggiero wrote. He cited the dopamine-driven design of the apps as a barrier to quitting, recalling a time he placed a $10,000 bet while holding his newborn son.

Hoekstra’s legal strategy draws parallels to a landmark California case from March, where a jury found Meta and YouTube negligent for harms caused to a minor. In that ruling, attorneys argued that the platform’s design itself was the cause of injury. Hoekstra is applying this same legal theory to betting apps, arguing that push notifications and bonus alerts create a persistent ambient presence that exploits moments of emotional vulnerability.

Joe Maloney, president of the Sports Betting Alliance, an industry advocacy group, characterized cases like Ruggiero’s as outliers. He maintained that online gambling is primarily for entertainment and not wealth creation, pointing to tools that allow users to set deposit, wager, and loss limits. The Full Statements from FanDuel and DraftKings reiterate their commitment to responsible gaming protocols, including account blocking and self-exclusion features.

For individuals struggling with gambling, resources are available through the National Problem Gambling Helpline at 1-800-MY-RESET or Gamblers Anonymous at 1-855-222-5542.