Whether something is "risk free" can be difficult to measure concretely, which would support a puffery defense. Exaggerated statements or broad non-verifiable claims of superiority generally are viewed as statements upon which no reasonable consumer would rely, making them non-actionable as a matter of law. One potential defense to these claims is that these advertisements constitute non-actionable puffery. See Oswego Laborers' Local 214 Pension Fund v. Under New York law, much like under other consumer protection statutes and the Federal Trade Commission Act, a practice is deceptive if it is materially misleading to a reasonable consumer acting reasonably under the circumstances. These statutes prohibit consumer-oriented deceptive acts or practices and false advertising, respectively. District Court for the Southern District of New York asserting claims for, among other things, violations of New York General Business Law sections 349 and 350. Not surprisingly, these developments have prompted numerous putative consumer class actions challenging "risk free" advertisements as deceptive acts or practices, including a case recently filed in the U.S. Other regulators, such as the New York Attorney General, have suggested that "risk free" promotional offers are misleading, and have urged consumers to exercise caution before taking advantage of such offers. And regulators in several states, including Massachusetts, Ohio and Pennsylvania, have banned use of the phrase "risk free" in connection with promotional sports betting advertisements. In addition, these credits may expire if not used within a specified period of time.Ĭoncern that these promotions are not actually "risk free" has prompted certain industry participants to drop the term, opting for alternatives such as "sweat free" and "bonus bets" for new customers who do not win. The users would need to win bets placed with those credits to recover their initial wager. For a typical "risk free" offer, new users will wager their own money on an initial bet and, if that bet is lost, the wager is refunded with non-withdrawable credits that can be applied towards future bets. ![]() With sports betting quickly becoming a multibillion-dollar industry, it has attracted intense scrutiny from both regulators and putative class action plaintiffs.Ī recent focus of this scrutiny is the "risk free" promotional offer, often used to attract new customers. feature live, legal sports betting markets, and the market is growing. Currently, according to the American Gaming Association, 33 states and Washington, D.C. National Collegiate Athletic Association, which struck down the federal prohibition on sports gambling schemes, the sports betting industry has boomed. In the wake of the Supreme Court's 2018 decision in Murphy v.
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