BetMGM lobbies for arbitration in ‘free bets’ legal case
Operator argues terms and conditions necessitate scaled-down legal review in new memo to New York District Court
BetMGM has asked a New York District Court to downgrade a class action lawsuit over so-called ‘free bets’ to arbitration in a new memorandum over the case.
The class action suit, filed by New York resident Kenneth Sale in the US District Court for the Southern District of New York, centers on claims he was “seduced into gambling” by the operator through a combination of free and risk-free promotional bets.
It is these bets which Sale claims have violated New York’s consumer protection laws.
Sale registered for a BetMGM account in December 2022, placing a $10 bet and agreeing to abide by the operator’s terms of service document. He then placed a variety of bets between December 2022 and January 24, 2023.
As a new customer of the operator, he was entitled to a “risk-free” first bet of up to $1,000, claims which Sale has questioned in his suit.
“By no reasonable definition is the initial bet ‘free’ or ‘risk-free,” Sale’s initial complaint stated.
“There is, in fact, a huge degree of risk in making that first bet – including the real and immediate risk that the entire cash amount of the first bet will be lost in short order,” it added.
Under BetMGM’s procedures, to claim the free first bet, account holders must deposit funds, which, if they lose, will not be refunded, instead being paid via credits to their BetMGM account for the same amount.
BetMGM’s credits expire in seven days, with losing bets made with credits from previous losses not reimbursed if that player loses again.
According to the BetMGM memorandum, Sale did not contact BetMGM to resolve his dispute before filing his lawsuit, nor did he seek arbitration over his claims, something he agreed to do as part of consenting to the operator’s terms and conditions document.
BetMGM took aim at Sale, suggesting he had launched a “host of meritless” consumer protection claims about its marketing materials, asking the court to refer the case to arbitration rather than pursue a lengthy litigation.
“Mr. Sale also agreed that any dispute would ‘be submitted to judicial arbitration and mediation services for final and binding individual arbitration,’ in addition to agreeing to a broad class action waiver,” BetMGM’s memorandum stated.
“Neither federal nor state law permits Mr. Sale to circumvent his contractual obligations, and the court should compel arbitration,” it concluded.
If the court sides with BetMGM, Sale will be legally required to instigate arbitration proceedings and discontinue the class action lawsuit in full.
The case continues.