Philadelphia's ordinance was signed in June 2024 by Mayor Cherelle Parker. Her office did not immediately respond to requests for comment. The Law Department had no immediate comment.
Sports betting companies such as DraftKings and FanDuel FLTRF.L often face criticism for using promotions and technology that are allegedly designed to addict gamblers.
On April 8, a Philadelphia federal judge rejected DraftKings' bid to dismiss a proposed class action claiming that its “Casino Deposit Match,” “Risk-Free Bet” and “$1,000 Sportsbook Deposit” promotions were deceptive and misleading, causing customers to play longer hours and bet more money. The judge dismissed some claims.
Ordinance targets deceptive business practices
Philadelphia's ordinance authorizes the city of 1.57 million people to investigate reports of unfair and deceptive business practices that harm consumers, and specifically targets misleading finance plans and false advertising of product conditions.
If the city finds violations, it can take repeat offenders to court, and seek civil fines plus financial relief for consumers.
DraftKings said its lawyers met with the city on July 9, and there is a "credible threat" that Philadelphia will bring a civil enforcement action.
"The city has acted beyond the scope of its authority on matters governed by state law and regulated by the Pennsylvania Gaming Control Board," a DraftKings spokesperson said. "DraftKings remains committed to operating responsibly and in full compliance with Pennsylvania law, and we look forward to addressing this issue through the legal process."
DraftKings seeks to block Philadelphia probe and consumer law
DraftKings sued Philadelphia on Thursday to block it from enforcing a local consumer protection law and pursuing an investigation into the sports betting company.
In a complaint filed in Philadelphia federal court, DraftKings said Pennsylvania laws governing consumer protection and unfair trade practices forbade Philadelphia from enforcing a 2024 ordinance creating a municipal enforcement scheme to protect consumers.
DraftKings also challenged an April 24 subpoena from the City of Philadelphia Law Department, which sought information related to various activities including sports wagering, promotional credits and bonuses, VIP programs, and policies intended to thwart problem gambling.
The Boston-based company wants a judge to end the city's probe, and declare that the ordinance is both pre-empted by state law and unenforceable when applied to DraftKings' licensed gaming activities.
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