Some may consider them sore losers, but the ranks of fantasy sports players willing to litigate online giants DraftKings and FanDuel continues to expand at a time of unprecedented growth in America’s legalized sports betting options.
Whoever believed that there would come a day sports betting was considered more acceptable than fantasy sports?
Of late comes a class-action suit filed by fantasy sports player Christopher Leong claiming negligence by DraftKings during its popular but controversial Sports Betting National Championship event Jan. 11-13 in New Jersey. What was touted as an affair with $2.5 million in player payouts at stake is now tangled in litigation that seeks damages in excess of $1 million. The Leong suit also seeks refunds for all 192 contestants, who paid $10,000 apiece to enter the event.
By way of njgamblingsites.com, DraftKings is also accused in the lawsuit of overhyping and underperforming, “continually marketing to a national and large audience of participants, was, among other things, an unconscionable commercial practice that denied Plaintiff and the Class of the fundamental benefit underlying the opportunity to participate in the SBNC.”
Among other legal barbs: that DraftKings personnel of “arbitrary and capricious acceptance of some wagers and rejection of other similar wagers.”
Inconsistently enforced betting rules, and those that aren’t plainly visible and easily understood, not only make enemies of fans of the activity, but eventually are bound to blowback on the operators.
The Leong litigation is another in a line of lawsuits that question the credibility and control of the bosses of fantasy sports.
Back in 2016, Oregon resident Brandon Peck was one frustrated fantasy sports player. He was so flummoxed by FanDuel and DraftKings that he hired an attorney and filed a lengthy lawsuit in U.S. District Court in Portland. In addition to allegations that the outfits were running glorified illegal bookmaking operations online, Peck’s attorney unleashed a fusillade of what he claimed were related suspicious activities by the companies.
Peck’s lawyers Thomas D’Amore, Nicholas Kahl and James McDonough argued, “Recently, lawmakers have scrutinized Defendants’ business model and operations, alleging substantial similarities between Defendants websites, DraftKings.com and FanDuel.com, and online poker and other gambling websites.”
It’s not much of a stretch to surmise that the sites look so similar because they are so similar. At this point, it’s hard to find anyone outside the front offices of those troubled fantasy sports sites who will argue that what they provide isn’t an opportunity to gamble. The Peck calls it a “specious attempt to circumvent Oregon law which expressly prohibits ‘gambling’ and ‘betting.’ Defendants’ sports betting contests are based upon the performance of teams and individuals that participate in NCAA college football, NCAA college basketball, NFL, NBA, MLB and NHL, and also upon the partial or final result of games.”
No matter how well its defenders craft their argument, it sounds a lot like sports betting.
After an attempted merger was blocked by the U.S. Federal Trade Commission, the fantasy sports operations have continued to evolve, occasionally paying a high price for operating in a legal gray area. In 2017, they paid a combined $2.6 million fine to settle a federal unfair and deceptive trade practices complaint.
The class-action lawsuits allege much the same activity.
If anyone at DraftKings or FanDuel was really concerned about improving the image and credibility of their operations, they would long ago have banned their own employees from participating in the sporting events. Some of the fantasy sports outfits’ biggest winners, according to published reports and lawsuits on file, have come from in-house.
While the mainstream sports betting industry is gaining unprecedented acceptance, DraftKings and FanDuel increasingly find themselves putting out legal brushfires and pushed toward the margins of the business.
Contact John L. Smith at jlnevadasmith@gmail.com. On Twitter: @jlnevadasmith
