The online sports gambling industry is coming under increasing scrutiny in the U.S. after years of rapid expansion cheered on by politicians at all levels of government and regular Americans.
Now, the omnipresent industry has become a target for Richard Daynard, a law professor at Northeastern University famous for developing the legal strategy against Big Tobacco that ultimately led to a historic $206 billion settlement.
Videos by VICE
On Friday, the Public Health Advocacy Institute, where Daynard has long served as president, filed a class action lawsuit against DraftKings in Massachusetts, alleging that the online sports-betting giant widely marketed an “unfair and deceptive” $1,000 sign-up promotion earlier this year when sports gambling was first made legal in the state.
According to the suit, customers were led to believe they would receive the $1,000 promotional bonus for not much more than signing up. In fact, the fine print required them to deposit $5,000 into their account and then place $25,000 worth of bets within the first three months with the low odds of “-300 or longer.” Even when those requirements were met, the $1,000 could not be withdrawn, only used to gamble even more.
The lawsuit claims that the specifics of the promotion was designed to “confuse and mislead consumers,” make sure new users were “statistically likely to lose money,” and, maybe most significantly, “induce repeated exposure to a known addictive product.”
Do you have information about the online gambling industry? We want to hear from you. From a non-work device, contact our reporter at maxwell.strachan@vice.com or via Signal at 310-614-3752 for extra security.
DraftKings told Motherboard in a statement that it “respectfully disagrees” with the allegations and “intends to vigorously defend” itself. Prior to Friday’s lawsuit, DraftKings had attempted to discuss the issue with Daynard’s organization directly, but was ignored, the company said.
In his own statement, Daynard said online gambling was “creating a public health disaster with increasingly addictive products right before our eyes.”
“In fact,” he added, “massive advertising using unfair and deceptive promotions to hook customers on an addictive product bears an uncanny similarity to what the cigarette companies used to get away with.”
Over the past five years, legal sports gambling has exploded across the U.S. Thirty-eight states have now legalized some form of sports gambling since a 2018 Supreme Court decision struck down a federal law that banned sports betting at the state level. The expansion was aided by what The New York Times has described as an aggressive, industry-wide “lobbying blitz” and massive marketing campaigns on television and elsewhere.
The situation was compounded by the pandemic, as Americans still stuck at home during the pandemic searched for something to do at home, and the online industry took off. The number of people who bet on March Madness tripled between 2021 and 2019, and other sports saw similarly significant boosts, according to the American Gaming Association, or AGA.
Now, in the U.S. and abroad, some observers have started to express alarm at the omnipresence of online gambling. In September, a group of international public health experts published an editorial in the peer-reviewed journal Health Promotion International arguing that the gambling industry had adopted a “similar playbook” to Big Tobacco, not only through lobbying but by “co-opting the production of research” around its industry.
“This has also distorted the nature of research that has been produced and skewed towards the interests and objectives of the gambling industry,” the authors wrote.
The sports gambling industry has argued that legalization has allowed the industry to institute a number of safeguards, like identity verification, that allows for more responsible gaming. But a growing number of therapists and experts in the field say that the expansion has also led to an increase in problem gambling, especially among young men.
The nonprofit Public Health Advocacy Institute, which is based at Northeastern University’s law school, was founded by Daynard in 1979 with a focus on tobacco litigation, before expanding to also combat other public health concerns, including gun violence and gambling.
Daynard’s organization notes in its suit that “gambling products are not typical consumer products,” but addictive in the same way tobacco and heroin can be, according to both the American Psychiatric Association and World Health Organization.
“Marketers of a known addictive product should take special precautions to minimize addiction risk, not require $25,000 of gambling to qualify for a promotional offer to new customers who are likely to be gambling-naive,” the lawsuit states.
Daynard rose to fame in the 1980s for aggressively taking on the tobacco industry, including by digging up evidence that cigarette companies had “covered up” the dangers of smoking and criticizing the reliance on personal responsibility rhetoric. The battle culminated in a historic settlement between the four tobacco giants and attorneys general for 46 states.
He has now turned his interest toward the gambling industry, becoming interested in the topic after he began discussing the topic with Harry Levant a few years ago, according to The Financial Times. Levant had developed a gambling addiction as a lawyer and was sentenced to prison for stealing money from clients to fuel his addiction. He now works as a therapist who focuses on gambling disorders and serves as the Institute’s gambling policy advisor.
“The time has come to bring public health reform and regulation to the gambling industry,” Levant said in a statement. “Because lives are in the balance.”
