Philadelphia has asked a federal court to dismiss DraftKings’ challenge to the city’s consumer-protection investigation, calling the case “woefully premature” and seeking dismissal with prejudice. In a 38-page filing on Sept. 15, the city argued that the complaint should be thrown out for lack of jurisdiction under Federal Rule of Civil Procedure 12(b)(1), or alternatively for failure to state a claim under Rule 12(b)(6).
The city’s central argument is that DraftKings sought judicial intervention before the investigation had progressed beyond its initial stages. Philadelphia said the company had rushed to court rather than respond to an administrative subpoena or negotiate its objections, attempting to avoid even the initial stages of an investigation into marketing within the city.
As we reported in July, DraftKings, Crown PA Gaming and Golden Nugget Online Gaming sued Philadelphia after the city invoked its Consumer Protection Ordinance in connection with their licensed gaming operations.
Philadelphia’s motion also challenges the basis for federal jurisdiction. According to LegalNewsLine, the city said DraftKings had failed to adequately plead an amount in controversy and had not identified monetary harm, which it argued was unsurprising because any future enforcement remained hypothetical.
The dispute turns on whether Philadelphia may apply its local ordinance to gambling marketing and promotions. DraftKings has argued that the Pennsylvania Gaming Act and state consumer-protection law preempt the municipal regime, and that its online sports-betting operations are licensed and supervised by the Pennsylvania Gaming Control Board.
Philadelphia counters that its ordinance addresses unfair and deceptive advertising and promotional practices directed at city consumers, an area it says is not covered by the Gaming Act or its regulations. The city argued that the Gaming Act’s licensing and device-certification provisions do not regulate every aspect of a licensee’s business, and that its limited express-preemption clause concerns the location of gambling facilities rather than local consumer protection rules.
The city also said the First Class City Home Rule Act permits legislation that does not conflict with state law. It maintained that the Gaming Act’s marketing provisions are limited to responsible-gambling messages and restrictions on soliciting suspended or self-excluded accounts, rather than occupying the field of unfair or deceptive marketing.
Philadelphia enacted the Consumer Protection Ordinance in June 2024. The city Law Department says the measure permits it to monitor, investigate and enforce complaints about unfair or deceptive business practices, including through subpoenas. It may seek injunctions, penalties and restitution in court, while the ordinance itself creates no private right of action. The law can reach conduct up to six years earlier if that conduct also violated state law.
The April subpoena sought information including revenue from gamblers identified through analytics, as well as promotions and bonus offers. The federal case does not concern a specific DraftKings advertisement or promotion, but whether the city may investigate such practices under its ordinance.
