A New Jersey father lost nearly $1 million he stole from his wife and two kids while in the throes of a ruinous gambling addiction the man’s family claims was intentionally “nurtured” by DraftKings, a new lawsuit claims.
Lisa D’Alessando says her husband funded his habit by maxing out her credit cards and draining their young childrens’ savings accounts, which were funded entirely by gifts they had gotten for Christmas, their birthdays, and their baptisms, according to the federal lawsuit filed Thursday and obtained by The Independent.
In it, D’Alessandro, 32, accuses the online sportsbook of having “actively participated” in furthering her now-estranged spouse’s gambling problem, coercing him into wagering “exponentially higher amounts,” with increasing frequency, until he was a full-blown addict.
The husband, who is 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. However, by 2023, Mdallo was completely hooked, betting as much as $125,000 a month, the complaint states.
“You think you’re building a nest egg for yourself and your family, and it turns out it’s gone,” D’Alessandro’s attorney, Matthew Litt, told The Independent. “This was a middle-class family. A lot of it remains on a credit card, and the rest of it is just gone.”
D’Alessandro and the children, who are both under the age of 10, are now “doing the best they can” to recover, Litt said. “They’re trying. They’re fighting, 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 an associated increase in problem gambling, and researchers say legalized sports betting drains household finances faster and more thoroughly than other types of gambling. (The gambling industry denies this.)
“Mdallo” did not develop his crippling addiction organically, according to D’Alessandro’s complaint. Instead, it says DraftKings continually mines user data to pinpoint potentially lucrative prospects, and flagged Mdallo 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” from him as they could, the complaint continues.
The four VIP hosts looking after Mdallo knew that he was married with children, and knew that he was a problem gambler, because they spoke with him almost daily by text, telephone, or email, the complaint states. The hosts began by providing Mdallo incentives such as free bets and credits to cover his losses, in addition to gifts and trophies “for depositing money and gambling at levels far beyond his means.”
At the same time, customer-facing DraftKings employees are trained to recognize the signs of gambling addiction, and are taught that “a problem gambler will use any and all funds to which he has access to continue gambling — including and especially the funds of immediate family members,” the complaint contends.
Still, by 2022, DraftKings had upgraded Mdallo to “Onyx Elite level status,” and the VIP hosts began offering him, among other things, a free vacation and a “suite of high-end Apple products,” as well as more prosaic items such as a set of DraftKings-branded whiskey glasses, according to the complaint.
“They’re incentivized to keep them playing until they bottom out,” Litt told The Independent.
As the intensity of Mdallo’s habit increased, DraftKings failed to follow its own policy of requiring big gamblers to verify the source of their funds by furnishing either a W-2 or a bank statement, the complaint alleges. It says that Mdallo’s VIP hosts “knew that [he] would not be able to continue to deposit such large sums of money on its site if they required a verification,” because they “knew that the source of the money wagered by Mdallo1990 was illegitimate.”
If DraftKings personnel had done their due diligence, they would have seen that Mdallo at one point was wagering more than four times his $175,000 annual income, according to the complaint.
Still, it says the VIP Hosts “were instructed and/or incentivized to avoid providing information on addicted gambling resources to customers who exhibited symptoms of gambling addiction.”
“To be clear, this suit does not allege liability on the basis that Defendants passively permitted a problem gambler to use its gambling platform,” the complaint argues. “Rather, this suit alleges violation of New Jersey statutory and common law because Defendants actively participated in the addiction of Mdallo1990 by targeting him with incentives, bonuses, and other gifts to create, nurture, expedite, and/or exacerbate his addiction.”
The suit is reminiscent of one brought in October by a former Jacksonville Jaguars employee serving a six-and-a-half-year prison sentence for plundering more than $22 million of the NFL team’s money and betting it on FanDuel, a DraftKings competitor. In that case, Amit Patel — who was also represented by Litt — accused FanDuel of “ceaselessly enticing” him to become 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 almost $15 million on the DraftKings platform between January 2020 and January 2024, losing a total of $942,232.32 that in fact belonged to her and their two kids.
Her lawsuit accuses DraftKings of negligence, fraud, and violations of the New Jersey Consumer Fraud Act, and demands the company return the money she says Mdallo1990 stole from the three of them.
“Hopefully, we are able to help her,” Litt told The Independent. “It’s tough.”
