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A New Jersey father lost nearly $1 million he stole from his wife and two children while in the throes of a crippling gambling addiction, his family claims was intentionally “groomed” by DraftKings, a new lawsuit alleges.
Lisa D’Alessando says her husband funded his habit by maxing out his credit cards and draining their young children’s savings accounts, which were funded entirely by gifts they received for Christmas, birthdays and baptisms, according to a federal complaint. Thursday and received by The Independent.
In it, D’Alessandro, 32, accuses the online bookmaker of “actively participating” in furthering her now estranged spouse’s gambling problem, forcing him to bet “exponentially larger amounts”, more and more often, until he became a full-blown addict.
The husband, identified in court filings only as “Mdallo1990,” his DraftKings username, began using the online platform in 2020. That year, he never gambled more than $3,775 in a single month, according to D’Alessandro’s complaint. By 2023, however, Mdallo was completely hooked, betting as much as $125,000 a month, according to the complaint.
“You think you’re building a nest egg for you and your family, and it turns out it’s gone,” said D’Alessandro’s attorney, Matthew Litt The Independent. “This was a middle-class family. A lot of it stays on the credit card and the rest just goes away.”
D’Alessandro and the children, who are both under 10, are now “doing the best they can” to recover, Litt said. “They are trying. They are struggling, for sure.”
DraftKings did not respond to a request for comment.
Online sports betting is now legal in 39 states and the District of Columbia. Recent studies have found a related increase in problem gambling, researchers say legalized sports betting drains household finances faster and more thoroughly than other types of gambling. (The gambling industry denies this.)
According to D’Alessandro’s complaint, “Mdallo” did not develop his crippling addiction organically. Instead, DraftKings is said to continuously mine user data to pinpoint potentially lucrative prospects, and Mdallo has been flagged as a good target. So DraftKings invited him to join its “VIP Private Group” and assigned a team of “VIP hosts” to “extract as much money as possible” from him, the complaint continues.
The four VIP hosts who took care of Mdal knew that he was married and had children, and knew that he was a problem gambler, because they talked to him almost daily by text, phone or email, according to the complaint. The hosts began by offering Mdall incentives such as free bets and loans to cover his losses, along with gifts and trophies “for depositing money and gambling at levels far beyond his means”.
At the same time, DraftKings’ customer-facing employees are trained to recognize the signs of gambling addiction and learn that “a problem gambler will use whatever means he has access to to continue gambling — including, but not limited to, the means of current family members,” according to the complaints.
By 2022, though, DraftKings had upgraded Mdallo to “Onyx Elite level status,” and VIP hosts began offering him, among other things, a free vacation and “a set of high-end Apple products,” as well as more prosaic things like a set of glasses for DraftKings-branded whiskey, according to the complaint.
“They’re encouraged to keep playing until they hit the bottom,” Litt said The Independent.
As the intensity of Mdallo’s habit increased, DraftKings failed to follow its own policy of requiring high-rollers to verify the source of their funds by providing a W-2 or bank statement, the complaint said. He says Mdallo’s VIP hosts “knew that [he] they could not continue to deposit such large sums of money on their site if they needed verification,” because they “knew that the source of the money Mdallo1990 was betting on was illegitimate.”
If DraftKings staff had done their due diligence, they would have seen Mdallo at one point bet more than four times his annual income of $175,000, according to the complaint.
However, it said VIP hosts “were instructed and/or encouraged to avoid providing information about gambling addiction resources to users who exhibited symptoms of gambling addiction.”
“To be clear, this lawsuit does not allege liability on the basis that the defendants passively allowed a problem gambler to use its gambling platform,” the lawsuit states. “Instead, this lawsuit alleges violations of New Jersey statute and common law because the defendants actively participated in Mdallo1990’s addiction by targeting him with incentives, bonuses and other gifts to create, foster, accelerate and/or exacerbate his addiction.”
It’s a suit resembles the one adopted in October by the former Jacksonville Jaguars an employee serving a prison sentence of six and a half years for robbing more than $22 million of NFL team money and betting on FanDuel, a competitor of DraftKings. in that case, Amit Patel — also represented by Litt — accused FanDuel of “constantly luring” him into becoming a gambling addict by bombarding him with “relentless financial incentives, lavish trips, event tickets and other gifts.”
In all, D’Alessando says her husband gambled away nearly $15 million on the DraftKings platform between January 2020 and January 2024, losing a total of $942,232.32 that actually belonged to her and their two children.
Her lawsuit accuses DraftKings of negligence, fraud and violations of the New Jersey Consumer Fraud Act, and asks the company to return the money she says Mdallo1990 stole from the three.
“Let’s hope we can help her,” Lit said The Independent. “It’s hard.”