DraftKings Sues Philly As City Investigates Gambling Addiction
DraftKings has sued Philadelphia in federal court, seeking to halt an investigation into its sports betting practices and block enforcement of a local consumer protection ordinance, according to a report from Reuters.
The lawsuit follows an April 24 subpoena from Philadelphia’s Law Department requesting information about DraftKings’ sports wagering operations, promotional credits and bonuses, VIP programs, and problem gambling policies.
DraftKings argues that Pennsylvania law gives the state, including the Pennsylvania Gaming Control Board, exclusive authority over its licensed gambling activities.
The company claims Philadelphia’s 2024 consumer protection ordinance is preempted by state law and cannot be applied to its business.
City Probe Could Lead To Enforcement
Philadelphia’s ordinance allows the city to investigate allegedly unfair or deceptive business practices and pursue civil penalties and financial relief for consumers.
Research and surveys have shown that online gambling poses serious risks to users. For example, one recent survey found that 60% of online sports bettors report chasing their losses.
DraftKings said its attorneys met with city officials on July 9 and that it faced a credible threat of civil enforcement.
Philadelphia officials had not commented publicly on the lawsuit as of Reuters’ report.
The dispute comes as DraftKings defends a separate proposed class action alleging that several promotions were deceptive and encouraged customers to gamble longer and wager more.
A federal judge allowed portions of that case to proceed.
Why it Matters
Gambling addiction in Pennsylvania has increased since the state legalized online betting. To better understand the crisis, a state commission recently produced a landmark report with policy recommendations to rein in the industry.
Recently, FanDuel, DraftKings’ main rival, was under fire for allegedly using MLB star Bryce Harper to target a man with a gambling addiction. FanDuel is also facing litigation in Pennsylvania.
Pennsylvania was a key driver of a U.S. online gambling market that was worth $27 billion in 2025. The Keystone State is among the largest gambling markets in the country.
The DraftKings lawsuit against the City of Philadelphia isn’t the first court case between the sportsbook and a municipality. The City of Baltimore sued DraftKings and FanDuel for alleged consumer protection violations. That case is pending.
Image: Leonhard Niederwimmer/Pixabay.
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