DraftKings, FanDuel Cases Push Bounds of Design Defect Case Law

DraftKings Inc. and FanDuel Inc. are the latest apps targeted in a surge of consumer lawsuits seeking liability for what they say is a deliberately addictive and harmful platform design.

Like the recent landmark verdict against Meta Platforms Inc. and Google LLC, the sports betting apps are accused of designing their platforms to addict users with features like push notifications, personalized algorithms, and targeted advertising.

Three cases recently filed by the Public Health Advocacy Institute in Pennsylvania and Massachusetts state court are part of a broader litigation pattern aiming to extend products liability law—historically grounded in defective tangible goods—to harm from emerging technology. While the social media trial focused on youth mental health, the sports betting complaints were brought on behalf of adults who say the apps’ design can push recreational gamblers into ruinous addictions.

“The social media verdict may be recent, but the litigation’s been going for almost five years so this idea of digital products liability has been in development,” said Jennifer Hoekstra, a partner at Aylstock, Witkin, Kreis & Overholtz PLC who has worked on discovery in social media and video game addiction cases. The firm is involved with the Massachusetts cases and plans to bring several more.

“From our firm’s perspective, this is not just cutting edge, but the next wave of litigation,” Hoekstra said.

Since the US Supreme Court struck down a federal law banning sports betting in 2018, more than 30 states have made some form of sports betting legal. The American Gaming Association, a gaming industry group, reported that online gambling brought in $10.74 billion in revenue in 2025, contributing to a record year for the US commercial gaming industry.

Legal online sports betting operators have guardrails to encourage responsible gaming, said Joe Maloney, president of industry advocacy group Sports Betting Alliance, an organization that includes DraftKings and FanDuel as members. For example, both apps allow users to create deposit alerts and limits, review spending habits, place wager caps, and set time limits.

“Everyone universally acknowledges that this is an activity that is difficult for some people and so as part of that it is important that the companies that I represent, and the industry I represent writ large, commits to providing and platforming tools and resources that can help individuals of all types, tools and resources that can be adopted by all bettors that can promote positive play,” Maloney said.

‘Product Danger’

Though gambling and gambling addiction aren’t new, the latest lawsuits argue the app interfaces make sports betting more dangerous because they don’t have the same barriers that inherently restrict in-person wagers.

“No more traveling to Nevada. No more standing in line. No more waiting at the betting window for someone to take a bet,” the Pennsylvania complaint says.

While litigation against casinos from customers with gambling addictions largely has been unsuccessful, the Meta verdict and platform design claims pursue a different strategy that focuses on how product design “impairs free and autonomous decision making as opposed to the activity itself,” said Sara Gras, a professor at Seton Hall Law School.

“Manipulative design is being used to market things to us constantly,” and online sports betting operators can collect a vast amount of data on customers that give the app makers “a sort of look at your internal life in a way that not every retailer you interact with online can,” she said.

The Pennsylvania suit additionally calls out the wide variety of live-betting options that DraftKings and FanDuel offer. These kinds of bets on ongoing sports events, with odds constantly changing based on in-game developments, “hijack gamblers’ brains” and encourage compulsive use, the complaint asserts.

“What is clear to us about what is happening right now is that the ability to bet on individual plays, individual players, basically to place bets every minute of the day is basically a product danger,” said Andrew Rainer, PHAI’s litigation director and one of the attorneys in the Pennsylvania case.

Mixed Results

Prior product liability claims against DraftKings have seen mixed results so far.

Last year, a federal judge in Illinois said the app’s interface could be considered a product under Illinois law and allowed the plaintiffs to proceed with a consumer deception suit over the promotion of “risk-free” bets.

More recently, a federal judge in Pennsylvania dismissed a proposed class action alleging DraftKings designed its platform to be addictive, saying online sportsbooks don’t owe a duty of care to players who might be at risk for developing a gambling addiction.

“Despite a Pennsylvania judge already dismissing a similar class-action lawsuit brought by the Public Health Advocacy Institute, the very same group continues to pursue near identical claims in various states against DraftKings and other industry operators,” a spokesperson for DraftKings said in a statement.

FanDuel declined to comment on the litigation.

Technological Safeguards

Maloney stressed that opt-in features like time-on-app limits and wager limits, combined with responsible gaming resources within the apps, help protect against overuse and addiction. He added that features like push notifications and targeted advertising are aimed at keeping consumers on their sites instead of potentially more dangerous, unregulated platforms.

“Things such as push notifications and advertising are actually really important to retain customers that you might have because you don’t want them to go to your competitor in a legal regulated marketplace, but you certainly don’t want to lose them to a competitor in an illegal setting,” he said.

But responsible gaming features still put the onus on customers, Gras said.

“That is really problematic to shift responsibility for compulsive use,” she said. “Ultimately the burden then rests on the individual to both admit to and recognize their addictive behavior, but then also take sort of the extraordinary step of cutting themselves off at a point where it’s very likely that they may not really have the ability to act in their own best interest.”