A Michigan gambler is suing DraftKings, claiming the sportsbook let him—and potentially thousands of others—blow past mandatory cooling-off periods meant to curb compulsive betting.
Seven States, One Big Legal Headache
Filed in late December in Michigan federal court, the lawsuit by Michael Koester alleges DraftKings ignored responsible gambling laws in Michigan, Colorado, Connecticut, Indiana, Iowa, Louisiana, and New York. In each state, online gambling operators are required to enforce a 24-hour delay before a player can raise their deposit or betting limits.
Koester says DraftKings let him skip that pause entirely. According to the complaint, he raised his limits multiple times between 2022 and 2023 and ultimately deposited over $25,000—moves he claims would’ve been curbed if the waiting period had been honored.
He argues that by letting him raise limits instantly, DraftKings contributed to a damaging gambling spiral that state regulations were designed to prevent.
System Failure or Design Choice?
At the heart of the complaint is the platform’s handling of user-imposed restrictions. In Michigan, the rule is clear: users must wait 24 hours before decreasing the strictness of their own limits. Koester’s legal team says that includes raising limits—since doing so makes them less restrictive.
DraftKings seems to interpret that differently. The platform allegedly allowed limit increases to take effect right away if a previous restriction had already expired—no new cooling period required.
To bolster its case, the suit points out that other operators, including FanDuel and BetMGM, enforce longer wait times before users can raise limits. It also references Michigan’s regulatory history, claiming the state consciously chose a stricter framework modeled after Indiana, not New Jersey’s more relaxed version.
Regulatory Silence, Legal Action
Before taking the issue to court, Koester reached out to both DraftKings and Michigan’s gambling regulator. The Michigan Gaming Control Board opened an investigation but didn’t follow through with penalties or corrective action.
Koester says that doesn’t let DraftKings off the hook. He cites a 2025 Michigan Supreme Court ruling that allows private lawsuits even when regulators don’t act—setting a clear path for his case.
The lawsuit seeks class certification to include affected users in all seven states. For now, it asks the court to weigh in on the legal interpretation first, with the potential for broader implications across the industry.
Another Legal Front for DraftKings
This isn’t DraftKings’ only legal entanglement. The company is already fending off a lawsuit in Iowa over a disputed $14 million golf payout, while cities like Baltimore have taken aim at the company’s consumer protection practices.
Other states have slapped DraftKings with enforcement actions tied to credit card use, bonus terms, and reporting failures. But this case hits a different nerve—whether operators are actually following their own responsible gambling rules or simply using them for optics.
If the court sides with Koester, DraftKings and others could be on the hook for player refunds, triple damages, and violations of federal payment laws.
For online gamblers, the outcome could reshape how—and when—they’re allowed to adjust their limits, with real consequences for how sportsbooks manage impulse control tools.
