(AsiaGameHub) –   DraftKings, FanDuel, Genius Sports, and the National Football League are facing a product liability lawsuit filed by the Public Health Advocacy Institute (PHAI), which claims the firms collaborated to develop and profit from an “unreasonably dangerous” online gambling product built to fuel addiction.

The 81-page legal filing was submitted on March 24 at the Court of Common Pleas of Philadelphia County on behalf of two Pennsylvania residents: Christopher Sage and Terry Thompson. Live microbetting, which lets users place quick, consecutive bets during a sporting event, is the core focus of this lawsuit. 

The plaintiffs claim that the design elements of online sports betting platforms — such as tailored promotions, real-time statistics, and VIP outreach — are crafted to amplify addictive betting habits. 

Combined, the plaintiffs state they placed millions in bets and lost over $2 million while using the FanDuel and DraftKings Sportsbook applications. 

In the press release announcing the lawsuit, Mark Gottlieb, executive director at PHAI, said: 

“These defendants, including the NFL, are working in tandem to turn regular sports fans into constant gamblers. By leveraging coordinated immersive marketing, artificial intelligence, cloud computing, and customer-specific algorithms, they manipulate users’ cognitive processes and inflict lasting, severe harm on long-time fans like Mr. Sage and Mr. Thompson.”

The lawsuit alleges that the tactics used by these firms transform “casual sports fans and recreational bettors into compulsive gambling addicts.” 

By naming parties across the entire sports betting ecosystem — including sportsbook operators, data suppliers, and the NFL directly — the filing argues the system is set up so every participant helps boost betting volume, with all parties walking away with profits. 

The plaintiffs are requesting both compensatory and punitive damages, plus an injunction to halt the defendants’ supposedly wrongful conduct.

Lawsuit Targets Microbetting, Personalization & ‘Always-On’ Gambling

The “flawed design” of the named sports betting platforms lies at the heart of this lawsuit. The filing draws a comparison between modern apps and traditional sports betting, where fans had to travel to place wagers before a game began and then wait for the final outcome, claiming DraftKings and FanDuel eliminated those natural restrictions and replaced them with a quicker, constantly accessible system centered on in-game live microbetting.

The filing claims these apps “remove the limitations that once constrained in-person sports betting locations,” crafting a “tailored and ultra-fast sports gambling interface.” The lawsuit explains how these quick bets placed on individual pitches, plays, shots, or other in-game moments impact bettors, stating they trigger a “trancelike state known as ‘dark flow,’ where users become fully immersed in the game.” 

Unlike standard sports bets, which are settled only once a game concludes, microbets can be resolved in just a few seconds. All these elements create a fast feedback cycle that keeps users engaged and pushes them to place repeat bets. 

To support its case, the lawsuit draws a parallel between microbets and slot machines, noting that the practice “fully immerses users in the constant cycle of ‘pulling the lever’ or clicking to place the next microbet while waiting for the next potential win.”

As a result, the plaintiffs allege: 

• Christopher Sage developed a serious gambling addiction after using the apps, losing more than $40,000 on DraftKings and $130,300 on FanDuel.
• Terry Thompson faced even more devastating losses, with a total of approximately $1.52 million on FanDuel and $336,000 on DraftKings.

The filing also points out the role that tailored marketing plays in fueling addictive betting on these platforms, such as push notifications and VIP hosts assigned to high-spending users. The lawsuit claims that in some instances, these outreach efforts continued even after users tried to cut back or stop their gambling entirely.

These elements, the lawsuit contends, lead to a product design that prioritizes user engagement and corporate profits over the safety of bettors, drawing comparisons to highly addictive substances such as heroin, cocaine, and tobacco.

Commenting on the lawsuit, PHAI Litigation Director Andrew Rainer said: 

“Following the example set by the tobacco industry, the online sports gambling sector has crafted a highly addictive, nearly impossible-to-resist product that blasts consumers with dozens of betting chances each and every minute, leaving a wake of shattered lives, including our clients Chris Sage and Terry Thompson.

“Instead of continuing to line their pockets with billions in annual profits, those responsible for this destruction — DraftKings, FanDuel, Genius Sports, and tragically, the NFL — must be held accountable. This is the process we are launching today.”

Lawsuit Puts NFL, Genius Sports Relationship Under Scrutiny

A notable aspect of this lawsuit is the inclusion of the NFL and Genius Sports, whom the filing identifies as critical enablers of the modern sports betting ecosystem. 

Genius Sports holds exclusive rights to distribute NFL data to sportsbooks, supplying the real-time statistics required to run microbetting markets. The lawsuit claims the NFL has a direct financial stake in this system, as it holds an equity share in Genius Sports and its licensing agreements.

“The NFL Defendants engaged in unfair or misleading practices by providing DraftKings and FanDuel, via Genius Sports, with officially licensed live NFL game and player data and statistics — data they knew was essential for DraftKings and FanDuel to build microbetting options into the design of their Sportsbook apps,” the lawsuit alleges. 

Per the filing, this partnership benefits both organizations when betting volume rises, particularly high-frequency bets like microbets, which bring in significant commission revenue.

PHAI, the group that filed this lawsuit, has a long track record of legal actions against the tobacco industry, including public liability cases that resulted in multibillion-dollar settlements in the 1990s. Whether the group will achieve similar success in its fight against the sports betting industry will now be determined by the courts.