By Katherine Sayre
A Pennsylvania psychiatrist who lost thousands of dollars playing online casino games while being showered with betting credits is suing DraftKings, alleging that its VIP program fueled her addiction and ignored signs of trouble.
Kavita Fischer, who was profiled in a Wall Street Journal article and lost more than $400,000 in one year playing casino games on several betting apps, sued DraftKings Wednesday, claiming negligence and intentional infliction of emotional distress. She alleges that DraftKings' VIP tactics led her to lose about $153,000 in four months in 2023.
Fischer's case is one of several lawsuits filed this year related to the online gambling company's VIP practices. Some of the suits claim that VIP hosts -- company employees assigned to build relationships with gamblers -- accelerate gamblers' losses while ignoring signs of betting addictions or financial distress.
A DraftKings spokesman said loyalty programs are common across many industries and its rewards program is aligned with best practices across industries. "We are dedicated to promoting responsible play on our entertainment platforms by providing tools, resources, and education to support our players," he said in a statement.
Fischer said her VIP host repeatedly gave her credits, even after she told the host that she should quit gambling. The Journal previously reported that DraftKings gave Fischer about $36,000 in betting credits in the first four months of 2023.
At one point, Fischer asked her DraftKings host in an email whether the company gave out loans because she was having trouble paying her mortgage. The host responded by offering problem-gambling resources and asked whether she was gambling within her means.
According to the lawsuit, Fischer took nearly a week to respond to the host's question, and meanwhile, the company continued emailing incentives for her to deposit more money. The suit seeks unspecified compensatory and punitive damages.
VIP hosts connect with the biggest customers, a practice known in the industry as player development. Online gambling companies collect data on customers including their deposits, the frequency of betting and how much they lose, according to lawsuits.
Some of the recent suits say hosts encourage customers to spend beyond their means using that data, doling out credits in one-on-one communications. They also give tickets to sporting events and send gifts among other perks.
Sports-betting and casino apps are regulated on a state-by-state basis, and are required to varying degrees to have responsible-gambling programs, such as giving customers the option to limit or stop their spending for periods of time in the app. Companies also have the option of blocking an account.
In a lawsuit filed in January in New Jersey, a DraftKings customer named Matthew Youngs claims that after being drawn in by deceptive promotional offers, a VIP host began reaching out personally offering bonuses for more deposits.
In a separate lawsuit filed last month that is seeking class-action status, Eric Mirsberger alleged that DraftKings uses deceptive marketing and promotional offers to lure in customers, and that its VIP hosts convince customers to spend more despite red flags.
"VIP Hosts follow a standardized playbook that is carefully designed to entice their assigned users to return to DraftKings' platform often and gamble more," that suit claims.
Mirsberger's hosts stayed in contact with him, urging him at times via text message to act quickly on promotional offers by making a deposit, including during periods in which he tried to break after losing, the lawsuit says.
Mirsberger told his VIP hosts that he was struggling financially. "Just lost my last $1,750," he texted his host in September 2024 after receiving a $500 bonus, and couldn't pay his bills, according to the lawsuit.
DraftKings sent Mirsberger to a "player protection team" after he told his host he had "lost my final $3,400."
Between October and December of 2023, Mirsberger wagered almost seven times his annual income of about $28,000. At the urging of his VIP hosts, the lawsuit says, his gambling accelerated to almost 15 times his annual income of around $35,000 in 2024.
The company never verified his income or source of funds, according to the lawsuit. Mirsberger lost about $45,000 in less than two years.
Write to Katherine Sayre at katherine.sayre@wsj.com
(END) Dow Jones Newswires
February 13, 2025 11:00 ET (16:00 GMT)
Copyright (c) 2025 Dow Jones & Company, Inc.
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