DraftKings faces down seven state wide class-action lawsuit over gambling limits
DraftKings has been hit with a lawsuit accusing the betting company of breaking wagering laws in seven different states. The multi-state class-action is being headed by Michael Koester, based in Michigan, who claims that DraftKings is allowing players to increase gambling limits, circumventing state law.
This type of law is implemented in Michigan, Colorado, Connecticut, Indiana, Iowa, Louisiana, and New York. However, according to court documents reviewed by ReadWrite, Koester alleges that DraftKings allows users to go around this without a waiting period before kicking in.
Koester claims to know this information, as he himself has done it. According to the lawsuit, Koester has been a DraftKings user since 2021, with a spending limit implemented on December 31 of that year. Over the following year, he repeatedly got around this limit without being made to undergo the cooling-off period usually expected.
“The plain meaning of this regulation is clear that once a patron establishes any responsible gaming limitations (deposit, spend, time, wager amount), there must be at least a 24-hour waiting period after patron requests an increase to their self-imposed limits before that request can take effect.”
Koester also didn’t immediately jump into the lawsuit. It’s reported that he had contacted both DraftKings customer service and the Michigan Gaming Control Board, both of which shut down their investigations.
By law in these seven states, DraftKings should have imposed a waiting period before higher wagering limits could take effect.
DraftKings interprets law a little differently
However, DraftKings doesn’t see it that way. Instead, the betting app company claims that restrictions can only be circumvented if they expire.
Should the lawsuit be won, Gambling Insider reports that the case could expose DraftKings to large-scale refund claims. DraftKings will presumably be fighting this one hard, as it would open them up to refunds and other federal trouble.
In Connecticut, DraftKings has already had to hand back more than $ 3 million to thousands of customers after regulators decided some of its bonus offers broke state gaming and advertising rules. On top of that, a couple of class-action lawsuits over misleading sign-up and so-called “risk-free” bonuses are still moving forward after judges refused to throw them out.
In April of 2025, DraftKings was met with another class-action lawsuit, which took them to task over “risk-free” promotions. Massachusetts hit them with a $ 450K fine over credit card bets in August.
ReadWrite has reached out to DraftKings for comment on the lawsuit.
Featured image: DraftKings
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