An Indiana federal court has entered summary judgment for DraftKings Inc. in a dispute arising from voided wagers placed on an October 2023 NBA game between the Los Angeles Lakers and the Denver Nuggets. The case was brought by Matthew McAfee on behalf of a certified class of 99 Indiana bettors who alleged DraftKings improperly canceled winning wagers after the contest ended. The ruling turned on interpretation of Indiana Code Section 4-38-5-6, which generally restricts cancellation of accepted wagers but permits cancellation in cases of obvious error. U.S. District Judge James Patrick Hanlon concluded that the statute does not impose a deadline requiring a vendor to cancel before the end of a game.
The Voided Wagers and the Certified Class
The lawsuit focused on wagers that DraftKings accepted for the Lakers–Nuggets game and later canceled. According to the complaint, McAfee placed a $100 bet tied to specified players scoring more than specified point totals, a wager that would have returned $150,000 if paid as successful. During the game, DraftKings advised McAfee that settlement of the wager would be delayed, which McAfee attributed to DraftKings recognizing a problem related to the odds offered. McAfee alleged that DraftKings did not cancel the wager before the game or during play.
McAfee contended that his wager ultimately won, but DraftKings voided it the next day instead of paying it. In 2024, he sued DraftKings alleging violations of Indiana’s Deceptive Consumer Sales Act and breach of contract. The court previously dismissed the deceptive sales claim, leaving a contract theory premised on the contention that Indiana’s sports-wagering statute constrained DraftKings’ ability to void accepted wagers outside of obvious error. The case proceeded as a certified class action with 99 Indiana bettors who, according to the allegations, held winning wagers that DraftKings later canceled.
Competing Statutory Readings at Summary Judgment
At summary judgment, the parties advanced competing readings of Indiana Code Section 4-38-5-6. McAfee argued that the statute required DraftKings to determine whether a wager would be canceled for obvious error before the contest ended. In his motion, he maintained that if a wager was not canceled by the end of the contest, it became a winning wager that had to be paid. DraftKings countered that the statute did not prohibit cancellation the day after the contest and that the statutory exception for obvious error did not contain a timing limitation.
Judge Hanlon agreed with DraftKings’ construction. He held that the statute unambiguously bars cancellation of accepted wagers except in cases of obvious error, but that the obvious-error exception contains no express time restriction. The ruling further emphasized that the statutory text commits cancellation to the vendor’s discretion if an obvious error is found. On that basis, the court rejected McAfee’s proposed requirement that cancellation must occur before the end of the contest, reasoning that the statute’s structure grants discretion rather than imposing a deadline not stated by the General Assembly.
The Court’s Ruling and Contract Analysis
The court granted DraftKings’ motion for summary judgment and denied McAfee’s cross-motion. Judge Hanlon concluded that adopting McAfee’s interpretation would require adding words to the statute to mandate an immediate determination of obvious error and of whether patrons are winners as of the contest’s end. The decision treated the statutory issue as dispositive for the remaining breach of contract claim, which McAfee framed around statutory compliance and the asserted illegality of post-game voiding.
McAfee also argued that the statute’s provision requiring vendors to pay wins at the end of a sporting event would be rendered meaningless if vendors could cancel wagers after the event concluded. The court disagreed, finding that the argument did not advance McAfee’s position because he never became a winning patron under the operative framework applied by DraftKings. Judge Hanlon pointed to DraftKings’ House Rules, noting McAfee did not contest them, and determined that the rules permitted delayed settlement and contemplated that a wager could be settled as void rather than settled as winning. Because the wager was treated as void, the court concluded the statute’s protection for winning patrons did not apply to McAfee in this dispute.
Procedural Posture, Counsel, and Practical Significance
The case is captioned Matthew McAfee v. DraftKings Inc., No. 1:24-cv-01168, in the U.S. District Court for the Southern District of Indiana. Judge Hanlon’s decision resolved the case at summary judgment in favor of DraftKings. Counsel listed for DraftKings included attorneys from Coblentz Patch Duffy & Bass LLP. Counsel for both sides did not provide immediate public responses to inquiries following the ruling.
From a compliance and litigation perspective, the decision underscores the centrality of statutory text when assessing limits on a sportsbook’s authority to void accepted wagers for obvious error. The ruling also reflects how platform rules governing settlement timing may affect whether a patron is treated as a winning patron for purposes of statutory protections, at least where those rules are not contested and where the statute is read to preserve vendor discretion in the obvious-error context.
