Concerns Rise Over Addictive Design of Sports Betting Apps

Meta’s recent settlement of $17.1 billion over claims its platforms are addictive is leading some legal experts to tackle similar concerns in other areas. Florida attorney Jennifer Hoekstra, who was involved in prior legal action against Meta, has initiated 15 lawsuits targeting sports gambling apps FanDuel and DraftKings. The basis of these cases is that the gambling apps are engineered to be addictive.

“I represent individuals who have essentially lost their houses and their spouses and their kids over this,” Hoekstra explained to CBS News. “It’s the same type of workflow, the same type of notifications. It’s almost as if it’s the same type of addiction.”

The explosion of online sports gambling, with $167 billion wagered last year as reported by the American Gaming Association, has fueled financial concerns. A UCLA study noted bankruptcy and credit card delinquencies surged 25% in states with legalized online gambling. The National Council on Problem Gambling found that 8% of American adults exhibited problematic gambling behavior many times in the past year.

Gaming companies contest the lawsuits, denying that they promote addictive behaviors. FanDuel, the biggest online platform, stated, “Any claim that we don’t aggressively take actions to monitor and curb problem behavior is completely false.” The company reportedly spent $158 million on responsible gaming and excluded 5,700 users due to their gambling last year.

A CBS News investigation highlights attempts by companies to maintain user engagement, even when losses increase. “It’s less about cutting them off than slowing them down,” said a former FanDuel employee on condition of anonymity. “It’s never forever.”

The former employee indicated internal discussions often prioritized not discouraging bets, despite acknowledging excessive gambling.

Both FanDuel and DraftKings use various tactics to retain bettors’ engagement. These apps offer VIP perks akin to Las Vegas casinos, with luxury suite access and exclusive fan experiences. For instance, Esteban Ruiz-Haynes, a pest control salesman and sports app user, became a VIP with access to unique events and personal interactions with a FanDuel manager. His annual betting ranges from $80,000 to $120,000, often matching his annual earnings.

Louis Ruggiero, a recovering addict, described how after losing substantial amounts on FanDuel, the company offered him VIP status. “From that moment forward, I wasn’t just a customer, I was a target,” Ruggiero wrote, labeling the incentives as predatory retention.

The former FanDuel employee described the company’s robust data collection, monitoring bettors’ activity to target them with notifications and bonuses aimed at rekindling engagement. Hoekstra’s lawsuits argue these methods foster addictive behaviors akin to those introduced by social media platforms.

Hoekstra’s legal theories align with a recent California case where Meta and YouTube faced penalties for their platforms’ addictive design. She aims to apply similar concepts to gambling apps, suggesting their design promotes addiction.

A DraftKings spokesperson noted that while they cannot discuss ongoing litigation, they prioritize responsible engagement. They have implemented tools to help users manage spending and wagering limits.

For former gamblers like Ruggiero, claims of addiction by design resonate. He recalled trying to cease betting when his son was born but could not stop himself. “That thing is engineered to keep you going,” he emphasized.

Joe Maloney of the Sports Betting Alliance views cases like Ruggiero’s as exceptions, asserting that most users gamble responsibly. He noted the industry provides tools to help users manage their gambling better.

If you or someone you care about needs assistance, the National Problem Gambling Helpline offers help via 1-800-MY-RESET. Gamblers Anonymous also provides a hotline at 1-855-222-5542.

In their official response, FanDuel asserted their commitment to responsible gaming, investing $158 million in related efforts and instituting measures to prevent irresponsible gambling. DraftKings also emphasized their dedication to responsible gaming, mentioning tools for budget management and a dedicated team focused on responsible engagement.