DraftKings Accused of Closing Accounts, Pocketing Balances

Online sports betting company DraftKings Inc. fraudulently closes users’ accounts and steals their remaining balances, a class action suit filed Monday alleges.

Texas resident Eric Avila’s account was deactivated in August 2024 while he had a balance of $100, according to the complaint filed in the US District Court for the District of Massachusetts.

DraftKings users keep funds in their accounts to finance their wagers, which can come from their own bank accounts, their winnings, or incentive payments from the company, the complaint said.

Avila accused DraftKings of terminating his account under the false pretense that he had opened up multiple accounts in violation of the company’s terms of service. He claims he was unable to get his money back when he inquired about the account’s closing with customer service, creating a “catch-22 situation,” according to the complaint.

“Users cannot withdraw funds from their DraftKings account because DraftKings has decided the users do not have a DraftKings account,” the complaint said. Avila said he believes this practice “has resulted in DraftKings’ retaining millions of dollars properly belonging to users.”

Avila is seeking to establish a class that could represent thousands of people who were denied access to their terminated accounts to withdraw their balances. He claims the company breached its contract with users by preventing them from withdrawing their funds at any time, and violated Texas consumer protection law.

The Massachusetts-based DraftKings contractually requires disputes be handled in the state, according to the complaint.

Quat Law Offices and Waldo Gubernick Law Advocates LLP represent Avila.

DraftKings didn’t immediately respond to a request for comment.

The case is Avila v. DraftKings, Inc., D. Mass., No. 1:24-cv-13165, complaint filed 12/23/24.