Wednesday, August 5, 2026
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Suit in Federal Court Seeks Refund of Monies Californians Paid to DraftKings as Bets
Complaint in District Court for Massachusetts Calls for Certification of Class Consisting of Persons in State Who Were ‘Tricked’ Into Wagering and Lost
By a MetNews Staff Writer
Californians who placed bets via DraftKings, an online bookmaking outfit, would have their losings refunded, under a putative class-action lawsuit.
The action was filed Monday in the U.S. District Court for the District of Massachusetts. Defendant DraftKings, Inc. is a Nevada corporation headquartered in Boston.
Among the three named plaintiffs is Johnny Harris, a resident of California; the other two are Texans. The proposed California class is comprised of “[a]ll persons in California who spent money by wagering on DraftKings Prediction’s mobile or web platforms.”
The action is brought for the benefit of a “multi-state” class—defined as “[a]ll persons in Alabama, Alaska, California, Florida, Georgia, Hawaii, Idaho, Nebraska, New Mexico, North Dakota, Oklahoma, Rhode Island, South Carolina, South Dakota, Texas, and Utah” who made wagers through DraftKings—in “addition and/or alternatively” to a class comprised of bettors in each of those 16 states. The complaint sets forth (with paragraph numbering omitted):
“DraftKings is a leading U.S. online and app-based sports gambling platform with licensed mobile and/or retail sportsbook operations in many states across the country. However, there are a number of states that have not granted DraftKings a license to operate a sportsbook.
“These states either outright prohibit sports gambling or require sportsbook operators to obtain a license but have not issued a license to DraftKings.
“After years of not operating in these states, DraftKings has now attempted to circumvent the laws of these states banning its sportsbook operations.
“Through its wholly owned subsidiary, GUS III, LLC d/b/a DraftKings Predictions, DraftKings now operates ‘DraftKings Predictions’ in these states, offering online and app-based sports betting that is masqueraded as ‘event contracts’ in states where unlicensed sports betting is categorically illegal.”
The pleading explains:
“Through DraftKings Predictions, users may select outcomes of games and risk money on whether a certain team will win the game. If the predicted outcome occurs, the user receives a monetary payout; if the prediction proves incorrect, the user forfeits the funds used to purchase the contract.” Under California law, betters, as well as bookies, commit a misdemeanor. However, the complaint portrays those such as Harris who placed bets on sporting contests via DraftKings as innocents, saying:
“Defendants have, in the course of trade or commerce, tricked California consumers into believing that the operation of DraftKings Predictions is lawful in California….”
Explaining the alleged trickery, it points to “Defendants’ representations and omissions—that users are ‘trading’ or ‘predicting’ rather than wagering, that the product is lawful, that participants trade with one another in a neutral marketplace, and that the advertised odds reflect the cost of a transaction….”
The pleading says that Harris “actually relied on those representations and omissions in deciding to open an account, deposit funds, and place wagers, and he would not have done so had the truth been disclosed” and that other members of the public were likewise apt to be fooled.
Opened Account
According to the pleading, Harris opened an account with DraftKings Predictions—as is required to engage in wagering—in or about March of this year, placed ‘several dozen’ bets, assumed the operation was a lawful one, and “ultimately lost over $100, plus transaction fees.”
Although not spelled out, it appears that in seeking for Harris and California class members “the amounts they deposited and lost on DraftKings Predictions and the transaction fees they paid,” those amounts would not be off-set by moneys received by them from winning bets.
Harris and the California class seek relief under two sets of statutes contained in the Business & Professions Code: the Gambling Control Act, comprised of §19800 et seq., and the Unfair Competition Law (“UCL”), §17200 et seq.
Sec. §19801(d) provides that “no person in this state has a right to operate a gambling enterprise except as may be expressly permitted by the laws of this state.” California has granted no permit to DraftKings.
DraftKings’s operations are unlawful not only under that provision but also Penal Code §§330 and 337, anti-gambling laws, the complaint alleges.
“As a direct result of Defendants’ violations of California’s gambling laws, Plaintiff Johnny Harris and the California Class deposited funds and placed wagers on DraftKings Predictions and suffered monetary losses,” the pleading avers, contending that the plaintiffs are entitled to restitution.
A point apt to be raised in a motion to dismiss is that neither the Gambling Control Act nor the Penal Code provisions expressly creates a civil cause of action based on a violation and case law indicates that unjust enrichment, which is pled, does not constitute a standalone cause of action.
Unfair Competition
The UCL, invoked in a separate cause of action, provides in §17200 that “unfair competition” includes “any unlawful, unfair or fraudulent business act or practice” and §17203 authorizes a trial court to make such orders “as may be necessary to restore to any person in interest any money or property, real or personal, which may have been acquired by means of such unfair competition.”
Sec. 17204 permits the filing of a UCL action by specified government law offices or “by a person who has suffered injury in fact and has lost money or property as a result of the unfair competition.”
Civil Code Sec. 1021.5 provides for attorney fees for a prevailing plaintiff in litigation that has benefitted the public, and such an award is sought.
Aside from asking for restitution or disgorgement and attorney fees, injunctive relief and an accounting are requested.
The case is Gordon v. Draftkings, Inc., 1:26cv13525.
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