Overview of the Lawsuit

DraftKings hit with multi-state class action over betting limit, cooling-off violations - Gaming America

DraftKings is facing a multi-state class-action lawsuit alleging it allowed users to bypass mandated 24-hour cooling-off periods when raising betting limits.

DraftKings Inc., one of the nation’s largest online sportsbooks, is facing a federal multi-state class-action lawsuit that accuses the company of violating responsible-gambling rules by allowing users to circumvent legally required cooling-off periods when increasing wagering and deposit limits.

The complaint, filed on December 30, 2025, in the US District Court for the Eastern District of Michigan, seeks to represent customers from several states who allege similar violations.

The lead plaintiff, Michael Koester, a Michigan resident, claims DraftKings’ platform design enabled him to raise his betting limits immediately without observing minimum waiting periods required under multiple state gaming laws, contributing to significant gambling losses.

What the Lawsuit Alleges

According to the complaint, many states, including Michigan, Colorado, Connecticut, Indiana, Iowa, Louisiana, and New York, require a 24-hour cooling-off period before users can increase self-imposed deposit or wager limits once they have been set.

This type of requirement is aimed at curbing impulsive betting and protecting users from rapid escalations in gambling behavior.

However, the lawsuit contends that DraftKings’ platform allows users to instantly raise those limits without waiting, effectively bypassing the statutory consumer protections.

Koester alleges that between 2022 and 2023, he was able to repeatedly increase his limits, eventually placing wagers totaling more than $25,000 without the mandated delay.

The complaint argues these practices violate multiple states’ internet gaming and responsible-gambling laws, asserting that DraftKings’ platform accepts deposits and wagers that should have been blocked until cooling-off periods expired. If true, the lawsuit could impact how limits are enforced across numerous regulated markets.

States Involved and Broader Implications

The lawsuit specifically names seven states where alleged violations occurred: Michigan, Colorado, Connecticut, Indiana, Iowa, Louisiana, and New York.

Each of these jurisdictions has gaming laws intended to require reasonable restrictions on how quickly a user can alter self-imposed deposit or wagering caps.

Koester is seeking class-action status, meaning the case could potentially represent thousands of bettors who used DraftKings’ platform under similar conditions.

The suit frames the issue as one of statutory interpretation and consumer protection, arguing that increasing limits without the cooling-off period undermines the public policy behind those gaming safeguards.

Legal experts say this case could define how online sportsbooks implement responsible-gaming safeguards and whether platform design can create liability when it permits behavior that might violate state law, even if unintentionally.

It also arrives at a time when regulators and lawmakers are increasingly focused on how mobile gaming companies comply with responsible-gambling requirements.

DraftKings’ Response and Responsible-Gaming Context

As of now, DraftKings has not publicly responded to the complaint. The company has previously defended its responsible-gaming features, including self-exclusion tools, deposit limits and partnerships with third-party monitoring services designed to detect risky behavior.

Interestingly, the lawsuit was filed shortly after DraftKings announced a partnership with Mindway AI, an initiative aimed at bolstering its responsible gaming safeguards through advanced data analytics.

However, the complaint suggests that these measures may not address the specific issue of the alleged law-required limit adjustments and waiting periods.

If DraftKings chooses to fight the suit, it could argue that the statutory language is ambiguous or that its platform complies with the law as written, a common defense in cases involving complex technical requirements.

Why the Case Matters for Bettors and the Industry

This lawsuit underscores growing legal scrutiny of how sportsbooks implement and enforce responsible-gaming policies. While many states mandate features like deposit limits, cooling-off periods and self-exclusion, how these are enforced on digital platforms has been less tested in court.

A ruling in favor of the plaintiffs could force DraftKings and potentially other operators to revise how their systems handle limit changes and other protective measures, and might prompt regulators in other states to clarify enforcement expectations. Conversely, a decision in favor of DraftKings could affirm current digital gaming practices and limit regulatory exposure, at least until laws evolve.

A Legal Test of Responsible-Gaming Design

DraftKings’ latest legal challenge highlights a clash between platform design and statutory protections intended to prevent impulsive gambling behavior.

By allowing users to raise limits immediately, the company faces accusations of undermining consumer safeguards in multiple states.

As the case proceeds, its outcome could have wide-ranging implications, not only for DraftKings and its competitors but also for how responsible gaming laws are interpreted and enforced in the digital age of sports betting.