The American lawyer who took on some of the biggest tobacco companies over their practices – and won – has now set his sights on the gambling industry.
Professor Richard Daynard is a legal professional and lecturer with a long history of taking on major businesses in the pursuit of the ‘public good’.
He won an astonishing £164 million from the tobacco industry in the 1980s, arguing that the firms should have to payout for the suffering they had caused to those with nicotine addiction, as well as those that have been impacted by passive smoking.
Now he’s ready to take on one of America’s biggest gambling operators, DraftKings, in a legal battle that could have ramifications for the industry around the world.
The case will revolve around a welcome bonus that DraftKings offered to new customers.
That, argues Daynard, was a sign-up promotion that effectively induced players to bet as much as possible in order to ‘maximise’ their return from the offer – something that the legal eagle has described as ‘knowingly and unfairly designed’.
Daynard is launching the class-action lawsuit on behalf of two anonymous individuals in Massachusetts, who will no doubt win a handsome sum should the professor convince judges that DraftKings have failed to act in accordance with their licensing conditions. Nobody from the company has yet issued a public statement.
Ironically, DraftKings is headquartered less than a mile away from where Daynard teaches at the Northeastern University in Boston, while gambling was only legalised in Massachusetts for the first time this year.
And with the legal industry built upon case law and precedence, if Daynard does win then it could change the way in which betting firms are able to offer bonuses and promotions to their customers around the globe.
Bookmakers and betting sites welcome their new customers to the brand with an array of promotions, which range from free bets to deposit match style bonuses.
These typically have some smallprint attached to them known as wagering requirements, which stipulate how much a player has to wager, and in what timeframe, before they are allowed to withdraw any winnings accrued via the bonus.
These wagering requirements range from the fair to the downright obscene, with Daynard arguing that the need to bet as much as $25,000 in order to just claim a $1,000 bonus of ‘non withdrawable credit’ was ‘deceptive’ to customers who probably had no idea of the hoops they would have to jump through – given that the industry is so new to the state of Massachusetts.
The lawsuit raised challenges DraftKings to pay damages to the plaintiffs, with the papers stating that welcome bonuses remain ‘….a particularly unfair business practice because of the addictive nature of the underlying product.’
Expect the Unexpected
Daynard is, of course, no stranger to taking on big industry in cases that others might describe as impossible to win.
Many expected him to be laughed out of court when he took on the multinational corporations that made up the tobacco industry in the 1980s, but so persuasive was the professor’s argument that one of the biggest compensatory payouts in American history was the outcome of the case.
So there’s every chance that the sports betting sector could be in for a similar kicking if court officials agree that the wording of bookmaker bonuses is unfair or deceptive – if they do, it would create a sea-change in how these promotions are created and marketed around the world.
There’s already been movements in that area in the UK, with the government’s White Paper identifying the potential risks of welcome bonuses and the marketing of them. Indeed, it’s likely that legislation will tighten in this area, with firms expected to be more transparent in their promotional material while the length of time which punters have in order to clear the wagering requirements could also be extended.
A Gambling Commission survey found that 31% of respondents revealed that the attempt to satisfy the wagering requirements of a bonus made them ‘gamble more than they wanted to’, or engage in riskier tactics like accelerating the number of spins they play.
“Gamblers have reported engaging in higher risk behaviours, such as playing multiple games simultaneously, or using ‘auto-play’ functionality in order to play through bonus wagering requirements as quickly as possible,” the White Paper continues.
If Daynard can take down the gambling sector like he did the tobacco industry, such bonuses and promotions could become a thing of the past.