The suit was filed by players who accused the platform of running an illegal gambling enterprise. It accused DraftKings and fellow daily fantasy operator FanDuel of using money deposited by new players to fund awards for experienced, high-volume players.
After arbitration in November 2019, the players and DraftKings decided to attempt to settle the case without FanDuel’s involvement. FanDuel’s part of the case therefore remains open.
Under the agreement reached, which still needs to be approved by US District Judge George A. O’Toole, DraftKings will create two settlement funds, one consisting of $7.28m in “DK dollars”, or site credit, for class members with open DraftKings accounts.
For players who closed their accounts, a $720,000 fund will be disbursed among anyone who made a first-time deposit on the site before January 1 2018 and is not a lifetime net winner with the operator.
In addition to the monetary settlements, DraftKings has agreed to implement a number of changes to its site for two years, including limiting players to one account, preventing prohibited platform employees from entering any public contest with an entry fee, and flagging all highly experienced players with a symbol attached to their usernames.