BetMGM and Caesars Sportsbook face similar class action suits in federal court in New York, alleging “untruthful and deceptive promises.” The complaints involve promotions by the two online sports betting operators advertising “risk-free” or “free” first bets. Such offers usually require a qualifying deposit and may pay out betting credits rather than cash.
Messaging by the gambling industry is under intense scrutiny at the moment. The lawsuits come alongside moves by state regulators in Ohio and Pennsylvania to require operators to remove such “risk-free” and “free first bet” language from their marketing and advertising messages.
Elsewhere, lawmakers are proposing bills to do the same. Some of these efforts came about in response to a series of stories in the New York Times, starting Nov. 20, 2022, criticizing the practices of the online gambling industry.
The State of Online Gambling Language
When Ontario launched its legal online casino, poker, and sports betting marketplace on April 4, 2022, the province’s regulator instituted strict marketing and advertising guidelines. Legal online gambling sites couldn’t use language like “risk-free” or communicate bonuses in ads. Gamblers had to come to their sites.
Now, US online gambling operators are experiencing pushback against their marketing, too.
Massachusetts briefly considered blocking legal online sports betting operators from entering into agreements with affiliate marketing sites before that state’s March 10 marketplace launch. (Bonus and other Catena Media sites fall into this category.)
As a result, online gambling operators not named in these lawsuits are pre-emptively dropping certain phrases from their marketing and advertising messages.
On March 14, Sam McQuillan of Catena’s Legal Sports Report wrote about how Pennsylvania operators reacting to the PGCB order:
The increased regulatory attention led to many operators transitioning to other phrases, such as “no sweat” or “free credit” to market their offerings.
On March 15, Rebecca Hanchett reported for Gaming Today that Barstool Sports discontinued its “Can’t Lose Parlay” promotion in Massachusetts. That state’s gaming regulators plan to hold a hearing this month on the marketing tool, wrote Hanchett for the Catena publication.
BetMGM, Caesars Sportsbook Class Actions Fit This Wave
On Feb. 27, the New York State Gaming Commission (NYSGC) proposed stricter marketing language for sportsbooks.
However, Andrew J. Shamis of Shamis and Gentile in Miami filed a lawsuit days before on behalf of Lachae Vickers, the lead plaintiff among more than 100 Caesars Sportsbook bettors. On Feb. 23, the resident of Far Rockaway in the New York City borough of Queens became the face of Vickers vs. Caesars Entertainment, which is proceeding through the US District Court for the Eastern District of New York.
On March 6, Shamis filed a class action against BetMGM in the US District Court for the Southern District of New York.
Shamis used almost identical language in Sale vs. BetMGM.
For instance, this paragraph is the same in BetMGM and Caesars’ complaints:
Glitzy, eye-popping promotions like “free” or “risk-free” bets are a sure-fire method of luring new bettors choosing among myriad online sportsbooks—all of whom generally offer the same technology and the same betting options.
Meanwhile, a class action alleging plaintiffs were wronged by a sportsbook’s marketing messages about “risk-free” or “free” first bets was filed against PointsBet in August in the US District Court for Colorado.
All of the cases say they’ll accept plaintiffs using the legal apps anywhere in the US.
The primary difference between the three class action lawsuits is the BetMGM and Caesars cases call for jury trials, and the Colorado suit requests Judge Regina M. Rodriguez award the plaintiffs money.
The Vickers Example
The BetMGM, Caesars, and PointsBet class actions make the same allegations about “risk-free” and “free” first bets. We’ll tell Vickers’ story, but Sale’s is almost identical.
Vickers claims that she deposited $125 in a Caesars Sportsbook account that she only opened because of the marketing promises. She lost her bet, then got site credits instead of money.
Vickers asserts that she wouldn’t have signed up for the account if she’d known she was going to lose money.
The lawsuit says:
At no time in Caesars Sportsbook’s marketing or during Caesars Sportsbook’s signup process were Plaintiff and the Class Members warned of the true financial risks of using the Caesars Sportsbook service for an initial bet—including the immediate and acute risk of losing the entire amount in that initial bet and the risk that losses will never be reimbursed by Defendant.
The case against Caesars Entertainment says only winners receive cash.
Plus, losers only get site credits that they have to use on the betting app within 14 days. If they lose again with those credits, those gamblers receive “no compensation whatsoever.”
So bettors have to immediately win with those credits “just to break even.”
The Caesars class action reads:
By no reasonable definition is the initial bet “free” or “risk-free.” There is, in fact, a huge degree of risk in making that first bet—including the real and immediate risk that the entire cash amount of the first bet will be lost in short order.
None of the marketing and advertising promises about “risk-free” and “free” first bets are true, alleged the Caesars suit.
What’s Next for the ‘Free Bet’ Suits?
Both suits await certification by their respective courts. That’s a necessary step in which the judge determines whether the nature of the case makes it suitable for the plaintiffs to be represented collectively.
There’s also a chance that the two cases could also be consolidated into one suit with multiple defendants. According to Catena Media’s legal expert John Holden, that is probably what the plaintiffs’ legal team is seeking in wording the complaints so similarly.
However, there is also a strong possibility that the cases could simply be thrown out of court before reaching that point. Holden says he expects to see motions to dismiss from both Caesars and BetMGM.
For many class actions, the certification step happens quite quickly. The fact that it hasn’t yet may be related to these additional possibilities of dismissal or consolidation.