The latest class action lawsuit targeting daily fantasy sports seeks restitution from the major media outlets, professional sports leagues and venture capital firms that have taken investment stakes in DraftKings and FanDuel.
First spotted by Sports Illustrated’s Michael McCann, the 132-page lawsuit is an amended version of an earlier action filed with the US District Court for the Southern District of Florida by two local DFS players, Antonio Gomez and John Gerecs.
The suit seeks to recoup money lost by all DFS players on DraftKings and FanDuel between Feb. 1, 2012 and Oct. 6, 2015. The defendants are accused of negligence, breach of contract, unjust enrichment, deceptive practices plus civil racketeering and conspiracy.
As with a separate class action filed in New York this week, the Florida suit targets banks and payment processors for enabling “illegal gambling” transactions with DFS sites. But the Florida suit also targets the National Basketball Association, Major League Baseball, the National Hockey League and Major League Soccer as part owners of the DFS sites.
Also targeted for ownership stakes are the Kraft Group, Legends Hospitality and MSG Sports and Entertainment, which are owned (respectively) by New England Patriots owner Robert Kraft, Dallas Cowboys owner Jerry Jones and New York Knicks owner James Dolan. Last week, the New York Post claimed that Kraft and Jones could be forced to ditch their DFS investment after the NFL decided to review “the entire fantasy sports situation.”
The Florida suit also goes after multiple venture capital firms as well as media outlets including Turner Sports, Time Warner, NBC Sports, Comcast, 21st Century Fox and Fox Sports Interactive Media.
DraftKings CEO Jason Robins is personally listed as a defendant, while FanDuel CEO Nigel Eccles’ name does not appear, suggesting that there is perhaps some benefit from Eccles having adopted a far less strident public posture than Robins since the controversy hit the mainstream media.
DraftKings staffer Ethan Haskell, whose inadvertent insider data leak sparked the whole DFS media controversy, is also listed as a defendant, as are a couple of “apex predator or shark bettor defendants,” Saahil Sud (aka maxdalury) and Drew Dinkmeyer (aka Dinkpiece).
The latter pair are members of “a tiny elite equipped with elaborate statistical modeling and automated tools that can manage hundreds of entries at once and identify the weakest opponents.” The suit accuses DraftKings and FanDuel of allowing these sharks to use automated scripts without informing the sharks’ victims of this “unfair advantage.”
The suit accuses the DFS operators of offering illegal gambling services in violation of Florida, New York and federal law. The suit says the banks either knew or should have known that they were “loaning money for illegal gambling” and thus players shouldn’t be liable for any DFS payments charged to these banks’ credit cards.
The RICO charges accuse the defendants of “providing legitimacy and funding” that helped grow this “illegal internet gambling enterprise” into the “multi-billion dollar business” it has become. The suit cites the violations of New York and Florida state law as having provided the necessary predicates for triggering the federal Illegal Gambling Business Act (IGBA).
While the Florida suit is unique for expanding the scope of the defendants, the dozens of class action suits filed since the controversy broke still face serious obstacles to success. However, they could get a boost if Justice Manuel Mendez approves New York Attorney General Eric Schniderman’s applications for preliminary injunctions against DFS operators at a hearing on Nov. 25, thereby upholding Schneiderman’s definition of DFS as an illegal gambling activity.
