DraftKings Stock Slips Over Tighter Regulatory Scrutiny, Reported Lawsuit: Retail’s Bearish
By Stocktwits Inc | First Published Dec 17, 2024, 9:31 AM ISTAccording to a Bloomberg report, the company faces a Federal lawsuit over video viewing and video game-playing information it shared of its users on third-party platforms
Digital sports entertainment company DraftKings’ ($DKNG) stock dipped 1.6% on Monday as the company faces increasing regulatory pressure and a reported class action lawsuit, dampening retail sentiment.
According to a Bloomberg report, the company faces a Federal lawsuit over user video viewing and video game-playing history it shared on third-party platforms, including Meta Inc. The alleged privacy breach would violate the Video Privacy Protection Act.
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Lead plaintiff, Jeffrey Wan, reportedly alleged DraftKings used online tracking tools to gather information on users' viewing histories.
A class action lawsuit in New York, meanwhile, alleged “unfair and deceptive marketing practices regarding its deposit bonus promotions,” according to a report by SBC Americas.
The report cited documents filed in the U.S. District Court for the Eastern District of New York against DraftKings that alleged “intentional misrepresentation, fraudulent inducement and unjust enrichment over its marketing practices for first-time deposit bonuses.”
Retail sentiment on Stocktwits has stayed ‘bearish’ while the message volumes have increased to ‘high from ‘low’ over the past day.
Bearish sentiment on Stocktwits highlighted prospects of imminent regulatory scrutiny of the industry.
One Stocktwits user was hopeful of capitalizing on the stock’s dip.
In a recent poll, a majority of Stocktwits users chose regulatory fears as the number one hurdle facing the company.
DraftKings stock is up 16.8% year-to-date.
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