Rigged Against You: Financial and Moral Wellbeing at Stake in DraftKings Lawsuit

By: Zen Rizzuto-Flancbaum*                                                        Posted 03/13/2025

Setting the Odds: Why This Bet Against DraftKings Matters

DraftKings’s post-outcome cancellation of winning bets highlights an unfair sports betting system that erodes consumer trust, signals an urgent need for state intervention, and nullifies contractual obligations.[1]  On February 7, 2025, a federal court allowed Matthew McAfee to proceed with his lawsuit against DraftKings for not paying out his winning bet.[2]  In October, 2023, McAfee  placed $100 on a seven-leg parlay between the Los Angeles Lakers and the Denver Nuggets basketball game, which DraftKings accepted.[3]  Because all seven legs of McAfee’s parlay hit, he won $150,000.[4]  Nonetheless, DraftKings refused to pay McAfee and canceled his bet the next day.[5]

Per DraftKings’s policy, it can cancel bets “regardless of whether the event has been settled or not” for almost any reason.[6]  Here, DraftKings claimed the betting odds were “erroneously low.”[7]  In Indiana, where this suit is taking place, a plaintiff successfully recovers under a breach of contract claim where they can prove the following: (1) a contract existed, (2) the defendant breached it, and (3) the plaintiff suffered damages because of the defendant’s breach.[8]  Because DraftKings’s rules were not attached to the complaint, they cannot be considered in DraftKings’s motion to dismiss the case.[9]

A Regulatory Shuffle: Dealing with McAfee’s DSCA Claim

In addition to McAfee’s breach of contract claim, he alleged that DraftKings violated Indiana’s Deceptive Consumer Sales Act (“DCSA”) by refusing to pay him after he won the bet.[10]  To win, McAfee must show that canceling the bet was “an incurable deceptive act,” which McAfee relied on to his detriment, and that it was not remedied after he brought it to DraftKings’s attention.[11]  While McAfee conceded that he did not plead detrimental reliance, he urged the court not to require it when the deceptive act occurred after the transaction.[12]  In response, the court emphasized that Indiana’s DCSA only allows a “person relying upon an uncured or incurable deceptive act to bring an action for damages.”[13] 

McAfee further rebutted the detrimental reliance requirement under these circumstances by reasoning that the Indiana Supreme Court could not have required pre-transaction reliance (i.e., detrimental reliance) because that interpretation renders other parts of the statute meaningless or superfluous.[14]  Notably, Indiana’s DCSA prohibits deceptive acts that occur “after the transaction;” thus, requiring detrimental reliance before the transaction renders that part of the statute superfluous.[15]  Disregarding McAfee’s logical statutory interpretation because McAfee “did not cite any case law,” the court held that pre-transaction deception (i.e., detrimental reliance) is required and dismissed the claim.[16]  In making this decision, the court stated that the only one rendering language in the statute meaningless is McAfee—“the unqualified ‘relying upon’ language.”[17]  The difference, though, is that the court provided no logical foundation for its claim whereas McAfee did.[18]

Splitting the Pot: How a Class Action Could Raise the Ante

Lastly, McAfee moved to certify a class of Indiana residents who bet on the same game and had their bets canceled.[19]  At the time, DraftKings argued that class certification was premature and should be denied or at least deferred until this very motion to dismiss is finalized.[20]  But McAfee argued  that DraftKings waived its argument against class certification because it only provided procedural arguments—that it was premature or should be postponed—instead of substantive ones.[21]  The court agreed with this point.[22]  Nevertheless, it declined to enforce DraftKings’s waiver of any argument against McAfee’s move to certify a class of similarly injured plaintiffs.[23] 

DraftKings had until February 24, 2025 to amend its response in opposition to McAfee’s class certification and McAfee had until March 10, 2025, to respond thereafter.[24]   But on February 12, 2025, McAfee filed for leave to amend his class action complaint in response to the court’s rejection of his DSCA complaint.[25]  On February 21, DraftKings argued that because McAfee’s DSCA claim was dismissed with prejudice, the only issue left is whether DraftKings’s Terms of Use and House Rules validly allow it to void McAfee’s winning parlay, thus negating any alleged breach of contract.[26]  Additionally, on February 26, DraftKings argued that McAfee’s amended class action complaint contradicts his prior argument because it focuses on pre-bet misrepresentations instead of post-bet ones.[27]  While McAfee responded on March 11 by stating that DraftKings, once again, did not submit a substantive argument against class certification and therefore he not obliged to respond.[28]  Nonetheless, McAfee felt compelled to state that: (1) Seventh Circuit precedent does not require class certification to hinge on the merits of McAfee’s claims, as DraftKings suggests, (2)  McAfee did not plead a “completely new theory” in his amended complaint as the statement of facts is unchanged, no new claims were stated, and the essence of the DCSA claim is the same, and (3) McAfee is willing to re-file its motion for class certification for clarity if the court wishes.[29]

Chasing Losses: The Real Cost of (Sports) Betting

Whether McAfee wins or loses, this case exemplifies yet another way that online sports betting serves as an antithesis to human flourishing because of its negative clinical, psychological, and social correlates.[30]  Whether it is legal fees for suing an online sportsbook when they void a winning bet or the enchantment of sports betting itself, sportsbooks are driving an alarming amount of bettors into debt.[31]  One reason for this epidemic is that sports betting is seen as less risky, as bettors are misled to believe outcomes depend on skill rather than luck.[32]  Ultimately this deception, coupled with the inherently addictive nature of gambling, correlates, at least temporally, with a twenty-eight percent increase in bankruptcy filings in states that legalized online sports betting.[33]  The findings of a recent study conducted by the University of California Los Angeles’s Anderson School of Management have been particularly influential in drawing attention to this issue.[34] 

Closing the Bet Slip: A Call for State Intervention

Ultimately, state legislators should be more concerned about the negative effects of online sports gambling since the Supreme Court made clear in Murphy v. NCAA[35] that it is up to the states, and not the federal government, to legalize sports betting.[36]  While Senator Richard Blumenthal (D-CT) and Representative Paul Tonko (D-NY) recently proposed new federal regulation on online sports betting, it curtails the federalism principles of Murphy by establishing a federal ban on sports betting.[37]  Moreover, the suggested regulation focuses on setting wager and betting frequency limits, which is an insultingly paternal proposal for Americans, especially considering how there is no federal consumption limit on alcohol or tobacco.[38]  Instead, state legislators should hold sportsbooks accountable for the products they sell and if a sportsbook, which profits off Americans’ despair, assigns odds to a given event, it ought to pay out if the bet hits.[39]  As it stands, sportsbooks have far too much discretion in when they can void winning bets; this would be a good place to start.[40]

* Staff Writer, Jeffrey S. Moorad Sports Law Journal, J.D. Candidate, May 2026, Villanova Charles Widger School of Law.

[1] See McAfee v. DraftKings, Inc., No. 1:24-CV-01168-JPH-MJD, 2025 WL 437500, at *1 (S.D. Ind. Feb. 7, 2025) (insinuating repetitive nature of DraftKings post-outcome bet cancellation from attempt to certify putative class alleging breach of contract).  Another scandalous post-outcome cancellation occurred after the AT&T Pebble Beach Pro-Am golf tournament, hosted by PGA, was shortened from seventy-two to fifty-four holes due to inclement weather.  See Sam McQuillan, Which States Will Investigate DraftKings over Voided PGA Tour Bets?, Legal Sports Rep. (Feb. 12, 2024), https://www.legalsportsreport.com/165119/which-states-will-investigate-draftkings-over-voided-pga-tour-bets/ (indicating that Massachusetts, Maine, Pennsylvania, Arizona, Colorado, and New Jersey were looking to investigate DraftKings for suspicious cancellations of bets after they were accepted, and tournament winner was declared).  With looming inclement weather, DraftKings kept its books open and accepted bets up until a few hours before the event was canceled.  See id. (stating that DraftKings voided bets placed after 6:40 PM on day of tournament where event was canceled at 9:15 PM).  DraftKings’s rules at the time stated that “bets will be settled as long as there is a deemed tournament winner and a minimum of 36 holes played.”  See id. (providing DraftKings House Rules).  A professional gold better stated that sportsbooks, such as DraftKings, took advantage of bettors by leaving the betting lines open so late and “have no one to blame but themselves.”  See Jack Hirsh, Why Golf Bettors Were Frustrated by Voided Pebble Beach Wagers, Golf (Feb. 6, 2024), https://golf.com/news/bettors-upset-pebble-cancelation/ (reporting on event and providing bettors’ responses to DraftKings’s post-outcome cancellation).

[2] See McAfee, 2025 WL 437500, at *4 (granting McAfee’s motion to respond to matters presented by DraftKings not raised in McAfee’s original brief and denying DraftKings’s motion to dismiss breach of contract claim). 

[3] See id. at *1 (stating McAfee’s bet); see also Matt Ryan Webber, Parlay Bet: What It Is and How It Works, Investopedia, https://www.investopedia.com/parlay-bet-5217711 (last visited Mar. 1, 2025) (defining “parlay”).  A “parlay” is a bet where the bettor combines two or more bets, individually referred to as “legs,” into one wager.  See Webber, supra note 3 (explaining basic premise of parlays).  One loss on any individual bet causes the bettor to lose the parlay.  See id. (explaining riskiness of parlays).  Because betting on multiple outcomes to occur in a specific way is riskier, or statistically less probable, the payout is bigger.  See id. (explaining why parlay payouts are greater than single bet payouts).   

[4] See McAfee, 2025 WL 437500, at *1 (“DraftKings accepted the Bet and all seven legs hit.”).

[5] See id. (stating that DraftKings refused to pay and canceled McAfee’s bet).

[6] See General Betting Rules, DraftKings, https://sportsbook.draftkings.com/help/general-betting-rules/general-rules (last visited Feb. 19, 2025) (providing DraftKings’s betting policy).  Section 4.3 of DraftKings’s betting policy states that DraftKings can decline or void, in its sole discretion, any “requested” bet.  See id. (enumerating rights reserved to DraftKings for bet cancellations).  However, McAfee’s bet was accepted.  See McAfee, 2025 WL 437500, at *1 (“DraftKings accepted the Bet.”).  

[7] See McAfee, 2025 WL 437500, at *1 (giving reason for bet cancellation and refusal to pay).  DraftKings reserves the right to cancel bets, withhold payment, or both, if: (1) the event’s integrity is compromised, (2) the prices were manipulated, (3) the game was rigged or is under investigation for such, or (4) any factor shows that the event was unduly influenced by outside factors.  See General Betting Rules, supra note 6 (providing betting and payout limitations).  Moreover, DraftKings may void any bet, irrespective of its cancellation, “if it is obvious” that any “the bet was offered, placed and/or accepted due to an [e]rror.”  See id. (stating when bets can be voided).  DraftKings defines “error” broadly, and subjectively, making it applicable to nearly any scenario.  See id. (“‘Error’ is a mistake, misprint, misinterpretation, . . . technical hazard, . . . manifest error, . . . and/or similar. Examples of errors include, but are not limited to: (1) bets accepted during technical problems that would otherwise not have been accepted; . . . (6) odds being clearly incorrect given the chance of the event occurring.”).

[8] See McAfee, 2025 WL 437500, at *2 (providing pleading requirements for breach of contract in Indiana).  Here, McAfee placed a bet with DraftKings, it was accepted, McAfee won, and DraftKings refused to pay.  See id. (“DraftKings’[s] acceptance of Mr. McAfee’s bet alleges a contract, and DraftKings failure to pay the winning Bet alleges breach and damages.”). 

[9] See id. (responding to McAfee’s argument that “DraftKings House Rules are not alleged to be part of the contract . . . so they cannot be used to justify dismissal”).  If the House Rules were considered, DraftKings claims that they would justify cancelling McAfee’s bet.  See id. (claiming that House Rules justified bet cancellation).  But even if the House Rules were considered, the court would need additional evidence to establish that they applied to the bet.  See id. (explaining that House Rules alone would not be dispositive of summary judgment for DraftKings).  Excluding DraftKings’s House Rules at the dismissal stage is crucial because they were not included in the compliant, which plausibly alleges a breached betting contract under Indiana law.  See id. (“the general rule is that [material not referenced in the complaint] cannot be considered”).  This keeps the focus on McAfee’s claims—that DraftKings accepted and failed to pay a winning bet—without prematurely introducing unproven defenses, ensuring adherence to Rule 12(b)(6).  See id. at *1 (providing requirements to survive Rule 12(b)(6) dismissal).

[10] See id. at *3 (introducing McAfee’s second claim against DraftKings).

[11] See id. (reciting pleading standard under Indiana’s DCSA). 

[12] See id. (countering DraftKings’s argument that DCSA claim must be dismissed because McAfee did not plead detrimental reliance).  

[13] See id. (quoting Ind. Code § 24-5-0.5-4(a) (2025)) (providing beginning of court’s response to McAfee’s argument to set detrimental reliance aside under these circumstances).  Recent Indiana Supreme Court precedent speaks to this language and requires that a plaintiff “relied on the deception.”  See id. (quoting Hoosier Contractors, LLC v. Gardner, 212 N.E.3d 1234, 1239–40 (Ind. 2023)) (justifying position that consumers must have relied on some prior, deceptive act, and suffered injury because of it). 

[14] See id. at *4 (presenting further counterargument to detrimental reliance requirement: “the detrimental reliance requirement would read language out of the DCSA”).  Here, the court cites other Indiana Supreme Court Precedent disallowing a statutory interpretation that “renders any part of the statute meaningless or superfluous.”  See id. (citing ESPN, Inc. v. Univ. of Notre Dame Police Dep't, 62 N.E.3d 1192, 1199 (Ind. 2016)) (substantiating McAfee’s position). 

[15] See id. (explaining why requiring detrimental reliance renders other language in DCSA superfluous). 

[16] See id. (dismissing DCSA claim). 

[17] See id. (turning McAfee’s argument against him)

[18] See id. at *4 (“What’s more, it’s Mr. McAfee’s proposed remedy that would require removing language from the DSCA.”).  For further discussion of McAfee’s position that requiring pre-transaction reliance renders the former language of Indiana’s DCSA statute meaningless or superfluous, see supra notes 14–16 and accompanying text.  If pre-transaction detrimental reliance is required, post-transaction deception would be irrelevant; but if it is not irrelevant, requiring both pre-transaction and post-transaction detrimental reliance is syntactically, linguistically, and logically inconsistent because the term “detrimental reliance,” as interpreted by this court, means pre-transaction deception.  See McAfee, 2025 WL 437500, at *3 (“In short, the DCSA requires consumers to rely on the deceptive act and suffer an injury as a result—known as detrimental reliance.”).

[19] See McAfee, 2025 WL 437500, at *4 (presenting McAfee’s potential class action against DraftKings). 

[20] See id. (urging Court to delay more substantive briefing on class certification until motion to dismiss is decided). 

[21] See id. (“DraftKings has waived all arguments against certification because it did not substantively oppose certification.”).

[22] See id. (stating that DraftKings did not address merits of class certification which amounts to waiver of any argument against it). 

[23] See id. (providing that Federal Rule of Civil Procedure 23 requires class certification to be “rigorously analyzed” and it needs to be satisfied to ensure class certification prerequisites are met). 

[24] See id. (setting dates for each party to address class certification).  In conclusion, the court granted DraftKings’ motion to dismiss McAfee’s DCSA claim, denied its motion to dismiss McAfee’s breach of contract claim, and instructed both parties to address the class certification issue more thoroughly.  See id. (issuing final ruling). 

[25] See Pl.’s Mot. for Leave to File First Am. Compl., McAfee v. DraftKings, Inc., No. 1:24-CV-01168-JPH-MJD at *1–2 (S.D. Ind. Feb. 12, 2025) (asking court for leave to file amended class action motion).  DraftKings responded on February 18, 2025, requesting an extension to respond to McAfee given his new motion and McAfee did not oppose it.  See Def.’s Unopposed Mot. For Extension of Time to File Resp. to Compl. And Mot. for Class Certification, McAfee v. DraftKings, Inc., No. 1:24-CV-01168-JPH-MJD at *2 (S.D. Ind. Feb. 18, 2025) (requesting extension). 

[26] See generally Def.’s Answer to Class Action Compl., McAfee v. DraftKings, Inc., No. 1:24-CV-01168-JPH-MJD (S.D. Ind. Feb. 21, 2025) (answering McAfee’s amended complaint).

[27] See Def.’s Opp’n to Pl.’s Mot. for Leave to File First Am. Compl., McAfee v. DraftKings, Inc., No. 1:24-CV-01168-JPH-MJD at *8 (S.D. Ind. Feb. 26, 2025) (stating that McAfee’s amended complaint alleges pre-bet detrimental reliance because of DraftKings’s promise to “pay the Bet if the Bet won” and “implicitly representing that it would only cancel the Bet as allowed by law”).  McAfee requested an extension to respond to this on March 4, 2025.  See Pl.’s Mot. for Extension of Time, McAfee v. DraftKings, Inc., No. 1:24-CV-01168-JPH-MJD at *8 (S.D. Ind. Mar. 4, 2025) (requesting extension).

[28] See Pl.’s Resp. to Def.’s Am. Opp’n to Pl.’s Mot. For Class Certification, McAfee v. DraftKings, Inc., No. 1:24-CV-01168-JPH-MJD at *1 (S.D. Ind. Mar. 4, 2025) (stating that reply is not required if argument is non-substantive). 

[29] See id. at *1–3 (presenting three responses to DraftKings opposition to class certification).

[30] See generally Eduardo Valenciano-Mendoza, Bernat Mora-Maltas, Gemma Mestre-Bach, Lucero Munguía, Jérémie Richard, Jeffrey L Derevensky, Marc N Potenza & Susana Jiménez-Murcia, Clinical Correlates of Sports Betting: A Systematic Review, 39 J. Gambling Stud. 579 (2023) (providing substantial evidence that sports betting is associated with psychological distress, addiction, substance abuse, impulsivity, financial hardship, and erosion of mental health, personal agency, and social bonds—each antithetical to human well-being).  People who online sports bet report “greater psychological distress.”  See id. at 580 (indicating significant mental health burden associated with online sports betting).  Sports betting is also linked to a gambling disorder, described as “persistent and recurrent problematic gambling behavior.”  See id. (correlating online sports betting with distress and impairment).  Online sports bettors also have a higher rate of substance abuse disorders compared to those who do not online sports bet.  See id. (suggesting strong co-occurrence of substance abuse with sports betting).  The review also references studies linking sports betting to “over-indebtedness” among online gamblers.  See id. at 620 (citing Anders Håkansson & Carolina Widinghoff, Over-Indebtedness and Problem Gambling in a General Population Sample of Online Gamblers, 11 Frontiers Psychiatry 1 (2020)) (indicating financial difficulties as consequences of online sports betting).  A decline in mental health can be inferred from the co-occurrence of “certain pathologies, especially substance use or other addictive disorders.”  See id. at 579 (summarizing findings of study).  Cognitive biases like the “illusion of control” in sports betting also reduce risk perception and inflate belief in personal skill, undermining rational decision-making and agency.  See id. at 580 (qualifying finding with representation that cognitive biases specific to online sports betting are understudied).  Lastly, online sports bettors are often “single, younger, and of lower socioeconomic status.”  See id. (suggesting social isolation and weakened bonds as correlate of sports betting). 

[31] See Robert Strezo, A New Debt Epidemic: The Risky Wager of Online Sports Betting, Ctr. for Pub. Just. (Mar. 7, 2024), https://cpjustice.org/a-new-debt-epidemic-the-risky-wager-of-online-sports-betting/ (stating that online sports betting apps stimulate brain in same ways that social media sites do but are more addicting because of pre-existing addictive nature of gambling).  The number of people driven into debt from online sports betting is alarming with twenty percent (totaling about twenty million) of adult males formerly or currently in debt from sports betting.  See id. (providing indebtedness statistics). 

[32] See id. (explaining that online sports betting advertisements both downplay risk and incentivize to-be customers with “referral bonuses and glamorizing it with celebrity endorsements”). 

[33] See Jonathan Ponciano, Are Americans Betting Their Future on Sports? Uncover the Surprising Stats, Investopedia (Jan. 10, 2025), https://www.investopedia.com/americans-sports-betting-losing-8768618 (adding that $450 billion has been wagered on online sports bets since United States Supreme Court made it legal in 2018). 

[34] See generally Brett Hollenbeck, Poet Larsen & Davide Proserpio, The Financial Consequences of Legalized Sports Gambling, Ssrn (Aug. 2, 2024), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4903302 (containing nearly 40,000 abstract views, as of February 27, 2025, since its original publication on August 2, 2024).  The study noted prominent takeaways relating to debt, gambler indebtedness, and financial harm to consumers from online sports gambling.  See id. at 18 (finding 30,000 additional annual bankruptcies); see also id. at 14 (indicating nine percent increase in auto loan delinquency for states that legalized sports betting and five percent increase in states with online access); id. at 14 (stating ten percent increase in likelihood of bettors using debt consolidation loans to pay off sports betting debt); id. at 11 (noticing 0.3% average drop in credit scores across states adopting sports betting and one percent drop in states with online access); id. at 15 (suggesting systematic reaction to gambling-induced indebtedness by pointing to 1.6% drop in credit limits in states allowing sports betting, 2.7% drop in states with online access, 3.6% increase in secured-to-unsecured loan ratio for states allowing sports betting, and 2% increase in secured-to-unsecured loan ratio for states with online access).  Other researchers have also noticed a significant relationship between sports betting activities and quality of life and friendships of bettors.  See Arvin Shaygan, Joseph Lambuth, Frank Song, Modesta Hurtado, Ty W. Lostutter & Scott Graupensperger, More than Fun and Games: Problematic Sports Betting and Its Adverse Impact on Mental Health and Well-Being in Young Adults, 342 Psychiatry Rsch. 1, 4 (2024) (noting statistically significant inverse relationship between “satisfaction with life, connectedness, and social function” and sports betting); see also Scott R. Baker, Justin Balthrop, Mark J. Johnson, Jason D. Kotter & Kevin Pisciotta, Gambling Away Stability: Sports Betting’s Impact on Vulnerable Households, Nat’l Bureau of Econ. Rsch. 45–49, http://www.nber.org/papers/w33108 (last visited Mar. 1, 2025) (finding that sports betting causes bettors to forego positive expected-value investments, that negative consequences of betting affect constrained households most, betting leads to less household savings, and betting leads to higher household debt).

[35] Murphy v. NCAA, 584 U.S. 453 (2018).

[36] See Mark Brnovich, Betting on Federalism: Murphy v. NCAA and the Future of Sports Gambling, 2018 Cato Sup. Ct. Rev. 247, 267 (2018) (“[T]he decision allows each state to decide for itself whether to legalize sports gambling.”). 

[37] See John Barr, Lawmakers Propose New Federal Regulations on Sports Betting, ESPN (Sept. 12, 2024, 3:30 PM), https://www.espn.com/sports-betting/story/_/id/41234480/congressmen-propose-new-federal-regulations-sports-betting (reporting on lawmakers’ bill to federally regulate online sports gambling).  But see Murphy, 548 U.S. at 486 (“The legalization of sports gambling requires an important policy choice, but the choice is not ours to make.”). 

[38] See Barr, supra note 37 (reporting that key aspect of lawmakers’ proposal is to limit wager amounts and frequency of betting). 

[39] See McAfee v. DraftKings, Inc., No. 1:24-CV-01168-JPH-MJD, 2025 WL 437500, at *1 (discussing how DraftKings is refusing to pay bet it accepted).

[40] For further discussion of how DraftKings may void bets if it was “offered, placed and/or accepted due to an [e]rror” where “error” means any mistake, interpretation, “and/or similar,” creative subjective catch-all clause that is manifestly unfair to consumers, see supra note 7 and accompanying text.