PointsBet Deceptive “Risk-Free” Promotions Class Action

This class action brings suit against PointsBet USA, Inc., an online sports betting company, and its subsidiaries in various states. The complaint alleges the companies used deceptive offers of “risk-free” bets and “refunds” to attract new customers and gain market share.

The class for this action is all persons who created accounts with PointsBet, using its website, mobile app, or other platform, who signed up for PointsBet accounts and placed bets with it using codes from promotional offers. A New York Subclass has also been proposed for those in the above class in New York.

PointsBet operates in Colorado, Illinois, Indiana, Iowa, Michigan, New Jersey, New York, Pennsylvania, West Virginia, and Virginia. It partners with CBS Sports, NBC Universal, the National Football League, the National Basketball Association, Major League Baseball, and the National Hockey League.

The complaint alleges that PointsBet grew enormously between 2019 and 2021, although its competition also grew during that time. Later in 2021, its market share of total bets placed began to decline.

Sports betting became legal in New York in January 2022. The complaint alleges that PointsBet “ran aggressive advertising campaigns” with sign-up offers. The complaint contends, “PointsBet’s marketing strategy was part of an intentional initiative to capitalize on the addictive nature of gambling, and the established susceptibility of online sports betters.”

Its homepage offered a “$2,000 risk free bet at signup” without references or links to terms and conditions. On its Promotions page, the complaint says, was another version of the offer, with “T&C’s apply” in small print, without links to the Terms and Conditions.

Below was a fuller description, which the complaint quotes as, “Get up to a $500 Refund (in Free Bets) if your 1st Fixed Odds Bet loses and up to a $1,500 Refund (in Free Bets) if your first PointsBetting wager loses!…”

Social media promotions, the complaint alleges, connected to pages saying, “Get Your First Bets Risk Free up to $2,000.” Users who hovered over a tiny “Click here for more info” displayed some further explanation, but the purported link to terms and conditions was broken.

The complaint alleges, “These offers promised that even if consumers lost their bets, those bets would be free of any risk, because PointsBet would refund the amount of the bet.” But the complaint claims that this was not true, and that instead, all the user received was a voucher for another bet that could not be exchanged for cash and that was good only for thirty days.

In addition, the payout for winning bets under the promotion was smaller than normal payouts, the complaint alleges, because it did not repay the amount of the bet. For example, if a $500 bet wins $300, the winner normally receives $800, but for wins under these promotions, the complaint says, the winner would receive only $300.

According to the complaint, then, the only way to get back their initial investment would be for users to win bets where the odds of winning were less than 50%.

Article Type: Lawsuit
Topic: Consumer
Tags: Deceptive Advertising, Fraudulent Inducement, Gambling or Gambling Games, Intentional Misrepresentation, Negligent Misrepresentation