DraftKings, FanDuel, Genius Sports, and the National Football League have been hit with a product liability lawsuit from the Public Health Advocacy Institute (PHAI), alleging the companies worked together to create and profit from an “unreasonably dangerous” online gambling product designed to drive addiction.
The 81-page complaint was filed on March 24 in the Court of Common Pleas of Philadelphia County on behalf of two Pennsylvania residents: Christopher Sage and Terry Thompson. Live microbetting, which allows users to place rapid, continuous wagers throughout a sporting event, is at the center of the lawsuit.
The plaintiffs allege that the design features of online sports betting platforms, which include personalized promotions, real-time data, and VIP targeting, are designed to maximize addictive behavior.
Together, the plaintiffs say they wagered millions and lost more than $2 million using the FanDuel and DraftKings Sportsbook Apps.
In the press release announcing the lawsuit, Mark Gottlieb, executive director at PHAI, said:
“These defendants, including the NFL, are engaging in a coordinated effort to convert ordinary sports fans into nonstop gamblers. By coordinating their use of immersive marketing, AI, cloud computing and algorithms customized for every customer, they hijack customers’ brains and cause catastrophic harm to lifelong fans like Mr. Sage and Mr. Thompson.”
The techniques employed by these companies turn “casual sports fans and recreational gamblers into hardcore gambling addicts,” the lawsuit alleges.
In naming entities across the sports betting ecosystem, including sportsbook operators, data providers, and the NFL itself, the complaint argues the system is structured so that each participant helps drive betting activity while all profit from it.
The plaintiffs are seeking compensatory and punitive damages, as well as an injunction against the defendants’ alleged “wrongful conduct.”
Lawsuit Targets Microbetting, Personalization & ‘Always-On’ Gambling
The “defective design” of the sports betting platforms named in the complaint is at the core of the lawsuit. It compares today’s apps to traditional sports betting, where fans had to travel to place bets before a game started and then wait for the final result, arguing that DraftKings and FanDuel removed those natural barriers and replaced them with a faster, always-available system built around live in-game microbetting.
These apps “eliminate barriers that previously restricted in-person sports betting parlors,” the complaint alleges, creating a “personalized and lightning-fast sports gambling interface.” The lawsuit describes how these rapid wagers placed on individual pitches, plays, shots, or other in-game moments affect bettors, claiming it induces a “trancelike state called ‘dark flow’ in which [individuals] become completely absorbed by the game.”
Unlike traditional sports bets, which resolve at the end of a game, microbets can settle in seconds. All of these features create a rapid feedback loop that keeps users playing and encourages repeated wagering.
In making its argument, the lawsuit compares microbets to slot machines and says it “completely absorb[s] the user into the continuous process of ‘pulling the lever,’ or clicking on the next microbet, in anticipation of the next win.”
As a result, the plaintiffs allege:
- Christopher Sage developed a severe addiction after using the apps, losing more than $40,000 on DraftKings and $130,300 on FanDuel.
- Terry Thompson suffered even more catastrophic losses, totaling approximately $1.52 million on FanDuel and $336,000 on DraftKings.
The complaint also highlights the role personalized marketing plays in driving addictive behavior on these platforms, including push notifications and VIP hosts assigned to high-value users. In some cases, the complaint alleges, these contacts continued even after users attempted to limit or stop their gambling activity.
Those features, the lawsuit argues, result in a product design that prioritizes engagement and revenue over bettor safety, drawing comparisons to addictive substances such as heroin, cocaine, and tobacco.
Commenting on the lawsuit, PHAI Litigation Director Andrew Rainer said:
“Following in the footsteps of the tobacco industry, the online sports gambling industry has developed a highly addictive, difficult-to-resist product that bombards consumers with dozens of betting opportunities every minute of the day and that is leaving a trail of devastated victims, like our clients Chris Sage and Terry Thompson.
“Instead of continuing to stuff their pockets with billions of dollars in annual revenues, the perpetrators of this devastation—DraftKings, FanDuel, Genius Sports and, tragically, the NFL—must be held to account. That is the process we are beginning today.”
Lawsuit Puts NFL, Genius Sports Relationship Under Scrutiny
One thing that stands out in this lawsuit is the inclusion of the NFL and Genius Sports, which the complaint describes as key enablers of the modern sports betting ecosystem.
Genius Sports is the exclusive distributor of NFL data to sportsbooks, providing the real-time statistics needed to power microbetting markets. The lawsuit alleges that the NFL has a direct interest in this system because it has an equity stake in Genius Sports and its licensing agreements.
“The NFL Defendants engaged in unfair or deceptive conduct by supplying DraftKings and FanDuel, through Genius Sports, with officially-licensed live NFL game and player data and statistics, which it knew was necessary for DraftKings and FanDuel to create microbetting opportunities as part of the design of their Sportsbooks Apps,” the lawsuit alleges.
According to the complaint, this relationship benefits both organizations when betting activity increases, especially high-frequency wagers such as microbets, which generate substantial commissions.
PHAI, the organization that brought the lawsuit, has a long history of litigation targeting the tobacco industry, including public liability cases that led to multibillion-dollar settlements in the 1990s. Whether they’ll find similar success going up against the sports betting industry is now for the courts to decide.
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DraftKings, FanDuel, Genius Sports, and the National Football League have been hit with a product liability lawsuit from the Public Health Advocacy Institute (PHAI), alleging the companies worked together to create and profit from an “unreasonably dangerous” online gambling product designed to drive addiction. The 81-page complaint was filed on March 24 in the Court
The post Public Health Group Sues DraftKings, FanDuel, Genius Sports, NFL Over ‘Addictive’ Microbetting appeared first on CasinoBeats.