Addictive Design Litigation Targets Gambling Operators: White & Case Analysis Highlights Operator Defenses Grounded in Regulation and Personal Responsibility
A California judge awarded a woman $6 million in damages in March after she argued that social media platforms were addictive by design. Not long after that ruling, some of the same lawyers filed a lawsuit against DraftKings and FanDuel using many of the same arguments.
Legal experts now see a potential wave of similar claims against gambling companies. Markus Funk and Michael Andolina, partners at White & Case, describe the social media verdicts as providing the plaintiffs’ bar with what it views as its first meaningful proof of concept. Those verdicts are already appearing in claimant-recruitment materials.
Funk and Andolina told the source that plaintiffs’ firms believe this is the time to move from ones and twos lawsuits to class action and mass tort actions. The pattern raises strategic questions for operators across sports betting, sweepstakes casinos, and prediction markets.
The Commercial Drivers Behind the Litigation Wave
Plaintiffs’ counsel seek to monetize the gap between public sympathy and existing legal doctrine. There is therefore undoubtedly a commercial incentive for plaintiffs’ firms to pursue these cases at scale, and the mass tort model is designed to generate volume.
Funk and Andolina point to the growth of litigation funding, AI-driven claimant recruitment, and the ability to aggregate claims across jurisdictions as structural factors potentially accelerating this litigation. Law firms have increasingly recruited losing gamblers to participate in lawsuits both in the US and the UK.
Sweepstakes casinos have frequently been the subject of litigation in recent years. Prediction markets are now emerging as a new target. From a commercial standpoint, operators must treat these suits as a cost of doing business in an environment where regulatory compliance alone may not deter every claim.
Core Arguments in the Addictive Design Claims
Jennifer Hoekstra, a partner at Aylstock, Witkin, Kreis & Overholtz, brought a lawsuit against FanDuel and DraftKings earlier this year. She told ESPN that the platforms develop and personalize themselves to the individual user.
When you log in, the algorithm knows who you are and what you’re interested in. It pops up, so it becomes more addictive for that person. Funk and Andolina note that the use of AI could be scrutinized, including tools such as personalized offers, algorithmic engagement optimization, and predictive modeling of user behavior.
Common claims include addictive design or defective product, negligence or failure to warn, internal knowledge of harm, analogies to social media, targeting of underage users, and foreign regulatory standards as benchmarks. Plaintiffs argue that features like variable rewards, frictionless transactions, personalized offers, and push notifications are engineered drivers of harm.
Funk and Andolina stress that foreign regulatory regimes are policy choices that are, formally speaking, not binding on U.S. causation analysis. This limitation matters for operators licensed under state frameworks that already impose responsible gaming obligations.
Strong Defenses Rooted in Regulation and Precedent
Gambling operators function within comprehensive licensing and compliance frameworks. Courts have been reluctant to impose additional common-law duties where a statutory scheme already governs. This creates a strategic differentiator between gambling defendants and social media companies.
Funk and Andolina outline several lines of defense. These include the no-duty doctrine, causation challenges, assumption of risk, alternative design challenges, and offensive litigation such as defamation or unfair competition claims.
In a Pennsylvania ruling this year, a judge dismissed another lawsuit against DraftKings. The court found that DraftKings has no duty of care to protect plaintiffs from spending too much money or from developing or fueling a gambling addiction.
The judge noted that no Pennsylvania state court, nor any federal court applying Pennsylvania law, has found that casinos or online sportsbooks owe a duty of care to compulsive gamblers. In the UK, Judge Nigel Bird dismissed a lawsuit against Betfair involving gambler Lee Gibson, who lost over $2 million. The judge wrote that Mr Gibson was determined to gamble and would have gambled elsewhere to the same extent.
Funk and Andolina emphasize that personal responsibility is not a product defect. This reality captures the fundamental tension in this litigation.
Risks, Limitations, and the Sweepstakes-Prediction Market Angle
One risk for operators is discovery that surfaces internal documents showing awareness of user vulnerability. Poorly framed internal discussions create the risk of transforming defensible cases into difficult ones, according to Funk and Andolina.
A further limitation is that while regulatory compliance offers a strong shield, plaintiffs may still attempt to use foreign standards or behavioral expert testimony. Funk and Andolina recommend Daubert challenges to exclude generalized behavioral theories that lack scientific reliability.
For sweepstakes casinos and prediction-market platforms, the exposure may differ. These emerging verticals often operate in gray zones or under lighter frameworks than traditional sportsbooks. The absence of the same comprehensive state licensing regimes that protect DraftKings and FanDuel could invite closer scrutiny on design features and user safeguards.
Yet the Pennsylvania and UK precedents on personal responsibility remain instructive. They reinforce that individual choice, informed by real-time information and self-exclusion tools, undercuts claims that platform design alone overrides autonomy.
The Bottom Line
US state licensing regimes and long-standing precedents on personal responsibility give regulated gambling operators stronger defenses than social-media defendants enjoyed in the recent California case. Funk and Andolina make clear that robust documentation, evidence-based responsible gaming tools, and proactive engagement with regulators position operators to prevail on early motions or at trial.
The convergence of litigation funding, AI recruitment, and analogies across verticals means sweepstakes and prediction-market platforms should not view themselves as immune. As someone who has spent decades observing the evolution of gaming regulation and liability, I see this moment as an inflection point where disciplined compliance becomes both a legal and commercial advantage.
Operators that treat these claims as a planning input—documenting decisions carefully, refining self-exclusion and loss information tools, and preparing Daubert motions—will navigate the wave more effectively than those who treat it as abstract risk. The line between product optimization and exploitative design will continue to be tested, but the regulated industry’s statutory foundation offers a clearer path than many critics acknowledge.
