Usually when a settlement is reached in a class action suit, there is a payment provided in cash. The two parties come to an agreement and then the payment is made appropriately. In a recent suit filed against online gaming company DraftKings, a settlement was reached but the outcome was site credits rather than cash value.
DraftKings was sued by the plaintiffs in the case, claiming the company did not represent the difficulty of winning a daily fantasy sports contest on its site clearly. The outcome of the settlement was that the operator must now pay up to the tune of $8 million. However, the majority of the funds will be paid in DK Dollars. A total of $7.28 million will be paid in the credits, which is the amount the plaintiffs complained about on the site in their case.
The settlement was concluded in the US District Court for the District of Massachusetts. A court document read that changes were made to DraftKings online platform as well as the monetary relief provided in DK Dollars.
Two funds are being created by DraftKings, one housing the $7.28 million to players who were part of the lawsuit and one with $720,000 which will pay former clients who no longer have an account with the company.
The brand has also chosen not to fight the counsel fee, which is $1.9 million. They will also pay $100,000 in expenses for the plaintiffs in the case.
The lawsuit was an ongoing battle having first started back in early 2016. Multiple lawsuits were filed against DraftKings and FanDuel back then, and they were combined and moved to Massachusetts federal court.
Claims included the difficulty of contests not being represented accurately as well as the companies falsely advertising its deposit match bonuses, concealing all related information in fine print. The plaintiffs also claimed that employees of both companies were using insider data to compete against clients of the brands in daily fantasy sports contests.