DraftKings Inc. has encountered a legal setback in its attempt to secure an early appeal in a class action lawsuit concerning the liability of its mobile application under Illinois product liability law. The sports betting company sought to certify an interlocutory appeal to the U.S. Court of Appeals for the Seventh Circuit, aiming to determine whether a mobile app or its specific features can be classified as a “product” under Illinois law. However, this request was denied, leaving the case to proceed in the lower court.
The plaintiffs in this case allege that DraftKings’ app is defectively designed, contributing to gambling addiction and resulting in significant financial and emotional harm. They argue that the app’s features, such as automated push notifications and escalating default wagers based on user history, exacerbate addictive behaviors. DraftKings contends that its app provides a service rather than a tangible product, and therefore should not be subject to product liability claims. The court acknowledged the complexity of this issue, noting the lack of a clear consensus on whether software or mobile apps qualify as products for tort liability purposes. ([cases.justia.com](https://cases.justia.com/federal/district-courts/illinois/ilndce/1%3A2025cv01336/473132/51/0.pdf?utm_source=openai))
This development is part of a broader trend where courts are grappling with the applicability of traditional product liability laws to digital platforms and services. For instance, in a separate case, the U.S. Court of Appeals for the Ninth Circuit dismissed appeals concerning the liability of tech giants like Apple, Google, and Meta for allegedly promoting illegal gambling through online casino apps. The court ruled it lacked jurisdiction, as the trial court’s decision was an abstract legal opinion rather than a final order on the claims. ([yogonet.com](https://www.yogonet.com/international/news/2024/05/24/72322-9th-circuit-dismisses-appeals-in-apple-google-meta-casino-app-liability-case?utm_source=openai))
Similarly, in New York, a federal judge dismissed a proposed class action against DraftKings, where plaintiffs alleged that the platform’s design fueled gambling addiction leading to severe emotional distress. The court concluded that mental distress, although real and severe, isn’t protected by product liability law absent physical injury. ([law360.com](https://www.law360.com/articles/2421485/draftkings-defeats-ny-products-liability-suit-over-betting-ads?utm_source=openai))
These cases underscore the evolving legal landscape as courts navigate the intersection of technology, consumer protection, and liability. The outcome of the DraftKings case in Illinois could have significant implications for how digital platforms are regulated and held accountable under product liability laws.