FanDuel Accused Of Falsely Advertising Welcoming Promotion For New Members
LOS ANGELES (CBSLA.com) — A Los Angeles County man is suing FanDuel, claiming the site falsely advertises a welcoming promotion for new members.
David Coleman filed the proposed class-action lawsuit Thursday in Los Angeles Superior Court against FanDuel Inc., an online fantasy sports website where users are charged for playing in fantasy sports contests. Users can win money if their team is victorious.
The suit alleges unfair competition, false advertising, breach of contract and unjust enrichment and seeks unspecified damages and a court order preventing FanDuel from engaging in further alleged unfair practices.
The lawsuit alleges FanDuel advertised it would pay a "welcome bonus," which included a "dollar for dollar" match of up to $200, to all new members. However, the lawsuit states that FanDuel uses a complex formula requiring users to keep playing and, in some cases, an investment of more than 2,500 percent over the original deposit.
The suit states the bonus is 4 percent of the entry fee for each contest entered by that customer.
"For example, if a customer signs up and deposits $200 as his initial deposit, FanDuel does not match the customer's deposit with a bonus of $200, and the customer does not have $400 in his account," according to the lawsuit. "Instead, the customer is required to spend his deposit money by entering daily fantasy contests."
If the customer enters a contest for $200 ... FanDuel distributes a bonus of $8, or 4 percent of the contest entry fee, the suit states.
"Based on this formula, the customer that made an initial deposit of $200 will have to spend $5,000 in contest entry fees in order to receive FanDuel's deposit matching bonus of $200," the suit states. "In other words, participants must invest an additional $4,800 with FanDuel before FanDuel releases its promised $2000 matching bonus."
Coleman, identified in the complaint as a Los Angeles County resident, put $100 down with FanDuel in May expecting a match of about $61, the suit states. But he ended up having to spend more than $1,500 to receive his entire matching bonus, according to his complaint.
