DraftKings, one of the nation’s biggest sports betting companies, is suing the City of Philadelphia in an effort to stop an investigation into the company.
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The city is investigating whether DraftKings has violated the Philadelphia Consumer Protection Ordinance, a 2024 law designed to protect Philadelphians from deceptive business practices, according to the lawsuit and accompanying documents.
In response, DraftKings contends a state law, the Pennsylvania Unfair Trade Practices and Consumer Protection Law, preempts the city‘s ordinance. The Boston-based company argues in the suit filed Thursday in federal court in Philadelphia that the city is trying to usurp the state’s authority through its investigation.
“DraftKings filed a lawsuit against the City of Philadelphia because we believe the City has acted beyond the scope of its authority on matters governed by state law and regulated by the Pennsylvania Gaming Control Board,” the company said in a statement. “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.”
The city declined to comment due to litigation being ongoing.
The legal sparring match comes as sports betting companies have come under fire locally in recent weeks due to tactics they’ve used to entice bettors to keep wagering money on their sites.
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Last week, The Inquirer reported on a personalized video that FanDuel, another sports betting company, sent to a bettor featuring Phillies star Bryce Harper. A lawsuit filed by the nonprofit Public Health Advocacy Institute on behalf of that bettor and another alleges the Harper video is only one of a series of incentives sports betting companies offer to patrons to keep them hooked.
A subpoena attached to the DraftKings case shows the city requested a host of documentation from the company by May 24. That included requests for details on how much money Philadelphians have wagered in the past three years, how many Philadelphians have placed bets on DraftKings in the past three years, and what kinds of marketing materials have been used with Philadelphians.
It’s unclear what, if any, of the documentation DraftKings provided the city.
The city had no right to request such documents due to the state law superseding the city’s version, DraftKings said in its lawsuit. It’s now asking the U.S. District Court for the Eastern District of Pennsylvania to rule that the city overstepped and let DraftKings off the hook for complying with the subpoena.
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