FanDuel facing consumer fraud lawsuit over unreturned deposits

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Posted: April 6, 2022, 4:19 a.m.

Last update on: April 6, 2022, 05:04h.

A New Jersey man claims that FanDuel violated his state’s Consumer Fraud Act, breached his contract with him, and engaged in a civil conspiracy by not returning him $300.

FanDuel Trial
FanDuel has a policy that deposits must be “played” before they can be withdrawn. Is it the fight against money laundering or a self-serving strategy? (Image: Flutter Entertainment)

Paul Manganaro wants to initiate a class action against the operator. This is on behalf of all New Jersey residents who have run into a FanDuel rule that prevents customers from withdrawing deposits they no longer wish to play.

In a lawsuit filed in New Jersey Superior Court in late March, Managrano argues FanDuel’s advertising is “fraudulent, misleading and incorrect” with respect to withdrawals.

On February 11, 2022, Manganaro says he deposited $500 on FanDuel Sportsbook. He has not participated in any of the site’s promotions.

Then, on February 12, he placed $200 on the Los Angeles Rams to cover the spread at Super Bowl LVI the next day. The Rams won the game but failed to cover the spread.

“You can only withdraw winnings”

The disappointment turned Manganaro away from sports betting. He initiated a withdrawal request for the remaining $300 on February 17. But the next day he received an email from the operator telling him that the request had been rejected because “you can only withdraw eligible winnings or promotions”.

He was told that he would have to “gamble”, or bet, his remaining balance before he could withdraw it.

FanDuel’s terms and conditions state:

The withdrawal process is for winnings only. If you would like a refund on any of your recent deposits, please contact our support team via the chat or email below.

The operator claims this is part of its anti-money laundering protocols, although it is also a very practical policy for a bookmaker who has a financial interest in keeping their customer’s money in play. .

Not in the rules

New Jersey’s gaming regulator, the Division of Gaming Enforcement (DGE), does not require its licensees to process withdrawals immediately. It grants an indefinite period of time to an operator to carry out the necessary verifications in the fight against fraud and money laundering. But it does not impose a gambling policy as part of its sports betting regulations.

The United States Department of the Treasury, in its National Money Laundering Risk Assessment report, released in February, says “minimal gaming” should be a red flag.

This is where a customer plays with only part of their deposit before withdrawing the full balance. But the report also says that this red flag should apply to large deposits, and Mangarano’s $500 barely scratches the surface.

In addition, live casinos, where real money can be converted into chips and then into checks, present a much greater risk for this type of activity than online sports betting.

“Easy Deposits”

Manganaro’s lawsuit argues that FanDuel’s own terms and conditions are contradictory.

They declare:

We may also carry out checks for compliance with the Terms, including anti-fraud checks on play habits and deposits before processing a withdrawal, and we may request additional information before authorizing a withdrawal. Subject to these checks, you may close your account and withdraw your deposits and/or winnings at any time and for any reason.

Meanwhile, FanDuel’s ad promises “easy deposits and fast payouts” and “lightning fast” withdrawals, with “convenience, safety and security”.

“Defendant intended Plaintiff and Class Members to be misled,” the lawsuit alleges. “He is also aware that the longer they hold the money of the group members and/or make it difficult for the group members to receive a refund of their deposited funds, the more likely it is that these funds will be gambled and subsequently lost. .”

The lawsuit seeks the return of all unused player balances, compensatory damages, an injunction requiring FanDuel to change its terms and conditions, court costs, and any other relief the court deems appropriate.

FanDuel declined to comment, citing ongoing litigation.

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