By Prof. Gil Fried, University of West Florida
The Public Health Advocacy Institute (PHAI) filed a landmark product liability lawsuit on March 24 against a series of defendants engaged in the development and distribution of sports betting opportunities. The lawsuit alleges that the defendants’ actions constitute unreasonably dangerous products. The “products” being challenged are online sports betting platforms that allegedly “relentlessly push addictive live in-game microbets.”
The complaint alleges that the defendants use sophisticated digital technology and software (including artificial intelligence) to create addicted gamblers and encourage them to place more microbets. The plaintiffs are two Pennsylvania residents, Christopher Sage and Terry Thompson, both of whom signed up to bet through the DraftKings and FanDuel sportsbook apps. Defendants include, but are not limited to, DraftKings, FanDuel, and Genius Sports Ltd. Another defendant is the National Football League (NFL) and its affiliates.
The complaint details how the NFL not only licenses player and game data to Genius Sports but also owns a stake in the company. Genius Sports supplies online sportsbooks, including DraftKings and FanDuel, with officially licensed data and statistics from professional sports leagues. This data is necessary to support online sports gambling, and Genius Sports is the sole supplier of the NFL’s live data and statistics. Thus, according to the complaint, Genius Sports and the NFL are profiting from increased microbetting during sporting events.
The complaint further alleges that the defendants lured plaintiffs into making numerous microbets on the DraftKings and FanDuel platforms. In addition to constant “push” notifications promoting microbets, both companies assigned each plaintiff a personal “VIP Host,” who communicated with them and enticed them with promotional offers such as trips to sporting events. These enticements allegedly continued even after one plaintiff indicated he no longer wished to participate in online betting on the DraftKings platform.
The plaintiffs are suing under the Pennsylvania Unfair Trade Practices and Consumer Protection Law, as well as asserting claims for design defects, failure to warn of the products’ unreasonably dangerous nature, negligence, and intentional infliction of emotional distress.
A key issue in the case is how “unreasonably dangerous” is defined. Under the Restatement (Second) of Torts § 402A, a product is in a “defective condition unreasonably dangerous” if it is more dangerous than an ordinary consumer would contemplate, given common knowledge about its characteristics. Courts examine whether the product poses a risk of harm greater than what an average user would reasonably anticipate in normal use or reasonably foreseeable misuse. Many courts apply the consumer-expectation test, asking whether the product is “dangerous to an extent beyond that which would be contemplated by the ordinary user with ordinary knowledge common to the community.”
As noted in the complaint, gambling is a recognized addiction. The current edition of the American Psychiatric Association’s Diagnostic and Statistical Manual of Mental Disorders (DSM-5) and the World Health Organization (WHO) classify gambling addiction alongside substances such as heroin, cocaine, and tobacco. However, is that knowledge commonly understood? Would an average person believe the risks associated with sports betting exceed ordinary expectations? While sports betting may be intoxicating for some, that alone does not necessarily render it inherently dangerous. As a result, the product liability claim is both novel and uncertain in its likelihood of success.
One way to evaluate the claim is by examining similar cases involving smoking, alcohol, and fast food. Courts have considered product liability claims involving alcohol and fast food but have generally been reluctant to classify either as “unreasonably dangerous” under § 402A. This reluctance stems largely from the view that their core risks are widely known and apparent to ordinary consumers. Where plaintiffs have gained some traction, it has typically been through misrepresentation or failure-to-warn theories rather than courts deeming the products inherently dangerous.
For example, in Pemberton v. American Distilled Spirits Co. (664 S.W.2d 690 (1984)), involving a minor’s death after consuming Everclear, the court held that claims alleging high-proof alcohol was “poisonous” and caused overdose did not establish a product liability claim. The court reasoned that the dangers of alcohol intoxication are apparent to the ordinary user, and Tennessee law negated any duty to warn of such obvious risks.
Similarly, in Pelman v. McDonald’s Corp. (237 F. Supp. 2d 512 (S.D.N.Y. 2003)), plaintiffs alleged that McDonald’s food contributed to obesity and related health problems. The court viewed the claims skeptically, emphasizing that for a product liability theory to succeed, plaintiffs must show that (1) the danger was not apparent to the average consumer, (2) the product was unreasonably dangerous for its intended use, and (3) the condition caused the harm. Courts have generally found that the health risks of high-calorie fast food are widely known or disclosed through nutritional information.
Courts also tend to resist imposing product-defect liability where harm results from long-term overconsumption and individual choices, viewing such cases as issues of causation and personal responsibility rather than defects rendering a product unreasonably dangerous for ordinary use.
Only time will tell whether product liability claims will succeed in the context of sports betting. Consumer fraud and negligence claims may present stronger arguments, but framing sports betting itself as an unreasonably dangerous product remains a novel and uncertain theory for courts.
