Editor
A class-action lawsuit filed in the US District Court for the Eastern District of Michigan alleges that DraftKings’ implementation of deposit limits violates state laws by failing to implement a mandatory “cooling-off” period.
The cooling-off period refers to a 24-hour span during which users are unable to change their own pre-set limitations, such as deposits, spending, time, or wager amount.
The basic premise is that users who fall into higher-risk categories may think differently about how much money they’re willing to risk if forced to take a break than they would in the moment. However, the crux of the case seems to be a difference in interpretation of when that 24-hour period begins.
The complaint originates in Michigan, but proposes a class action that could include users from Colorado, Connecticut, Indiana, Iowa, Louisiana, and New York, which have identical or nearly-identical requirements.
The relevant section of Michigan’s Lawful Internet Gaming Act (LIGA) states:
Once established by an authorized participant and implemented by the internet gaming platform, it must only be possible to reduce the severity of self-imposed limitations upon 24 hours’ notice.
The lawsuit, filed on December 30, alleges that DraftKings did not adhere to these rules and allowed gamblers, such as plaintiff Michael Koester of Michigan, to change their deposit limits before the minimum 24-hour cooling-off period had expired.
Koester has immediately petitioned the court for summary judgment on the first cause of action, the alleged violation of LIGA. Other claims, which include negligence, breach of contract, and violations of other states’ laws, will proceed regardless of the court’s decision on that motion.
What is the “Cooling-Off” Period?
The cooling-off period (also referred to as a “timeout”) is designed to keep gamblers from making rash decisions in the spur of the moment.
In Michigan, and numerous other states, users of online gambling sites such as DraftKings must pre-select limitations for themselves regarding deposits, spending, time played, and wager amount.
For instance, a user who was worried about spending too much on gambling might restrict themselves to $50 in deposits a month.
It’s possible to change those limitations, but only after a 24-hour period, where users theoretically reflect on whether it’s wise to make changes and potentially spend more on gambling. This is referred to as a cooling-off period.
In the lawsuit, the plaintiff, Michael Koester, claims that he was able to increase his deposit limits immediately, and the platform did not enforce a 24-hour waiting period. Koester would go on to remove limits numerous times between 2022 and 2023 and deposited more than $25,000 on the site.
It’s worth noting that a cooling-off period is different than self-exclusion. Self-exclusion is a more serious limitation where users intentionally suspend access to their accounts for a specified period.
DraftKings’ Defense May Question Wording
DraftKings’ defense team has not yet responded to the complaint. However, the plaintiff’s motion for a partial summary judgment anticipates one likely counterargument.
According to the motion for summary judgment, Koester and DraftKings disagree on when the cooling-down period should begin.
The court document states:
Plaintiff believes that the language of this statue is clear in that the 24-hour period only starts once the request for an increase is intiatied. […] Defendant, on the other hand, does not interpret the statute [this way]. Rather, their platform’s functionality enabled increases to become effective any time after the time limit of the previous limit had expired.
The last 12 months have seen several class-action lawsuits filed against DraftKings.
One, filed in January 2025, alleges that sign-up advertising by DraftKings that promotes “no-risk” or “no-sweat” bets is deceptive and leads customers to develop gambling addictions.
Another lawsuit, filed in the spring of 2025, argued that DraftKings exploited problem gamblers in Pennsylvania by targeting bettors on self-exclusion lists or those who had asked the company to suspend or remove their accounts.
Online Gambling Continues to Boom in Michigan
Michigan is one of the most successful states in terms of legal online gambling. The state passed LIGA in 2019 and has since seen the market grow significantly.
The gambling sector in Michigan generated $4.19 billion in 2024 and is expected to surpass $5 billion in revenue for 2025. The market continually ranks in the top three in the country (along with Pennsylvania and New Jersey).
Michigan also boasts one of the healthiest online poker markets in the USA, with four different regulated brands, including BetMGM, WSOP, PokerStars, and BetRivers.
The poker market got a significant upgrade in 2022 when Michigan (along with Delaware, Nevada, and New Jersey) entered into the Multi-State Internet Gaming Agreement (MSIGA). Pennsylvania entered the compact in 2025.
In addition, this summer BetRivers branched out into a multi-state network, launching simultaneously in Michigan, Delaware, and West Virginia.
Online poker players in Michigan also have the option of setting various limits on themselves, including deposit amounts and time played, similar to sportsbooks and casinos.
