DraftKings Sues Philadelphia to Halt Consumer Protection Investigation

DraftKings, along with Crown PA Gaming and Golden Nugget Online Gaming, has filed a federal lawsuit against the City of Philadelphia seeking to stop an investigation launched under the city's 2024 consumer protection ordinance. The legal action, lodged in the U.S. District Court for the Eastern District of Pennsylvania, challenges the city's authority to demand records from the sports betting operator.

The dispute stems from a subpoena issued by Philadelphia in April 2025, which requested detailed documentation on DraftKings' VIP programmes, promotional credits, bonuses, sports betting operations, and problem gambling rules. The city is probing whether DraftKings violated the Philadelphia Consumer Protection Ordinance (PCPO), a municipal law aimed at preventing deceptive business practices.

Legal Challenge

DraftKings argues that the PCPO is preempted by the Pennsylvania Unfair Trade Practices and Consumer Protection Law (UTPCPL), which concentrates public enforcement power with the state Attorney General and district attorneys. The suit also contends the ordinance exceeds the city's authority under the First Class City Home Rule Act and is preempted as applied to DraftKings' licensed gaming activities, which are regulated by the Pennsylvania Gaming Control Board under the Pennsylvania Race Horse Development and Gaming Act.

"The city has acted beyond the scope of its authority on matters governed by state law and regulated by the Pennsylvania Gaming Control Board," a DraftKings spokesperson said. "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 plaintiffs are seeking a declaratory judgment that the PCPO is invalid both on its face and as applied to their licensed gaming operations, along with an injunction to bar the city from enforcing the ordinance against them. The city declined to comment on the ongoing litigation.

Subpoena Details and Broader Context

The subpoena attached to the case shows Philadelphia demanded a wide range of data by May 24, 2025. This included records on how much money Philadelphians have wagered over the past three years, how many city residents placed bets on DraftKings during that period, and what marketing materials were used. It remains unclear whether DraftKings provided any of the requested documentation.

The legal battle unfolds amid heightened scrutiny of sports betting companies' marketing tactics. Last week, a separate lawsuit filed by the nonprofit Public Health Advocacy Institute on behalf of two bettors alleged that FanDuel sent a personalized video featuring Phillies star Bryce Harper to encourage continued wagering, highlighting broader industry concerns about incentives that keep patrons engaged.