New DFS class action targets sports leagues and other investors

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[Editor’s note: FanDuel is an advertiser of PFT and PFT Live on NBC Sports Radio. Also, NBC Sports has an equity stake in FanDuel.]

Yet another legal challenge has been launched against DraftKings and FanDuel. This one also targets some of the investors in the DFS model.

Via Michael McCann of SI.com, a class-action lawsuit filed Saturday in Florida against DraftKings and FanDuel also includes as defendants Major League Baseball Ventures, National Hockey League Ventures, the National Basketball Association, and Major League Soccer.

The NFL isn’t a party; Commissioner Roger Goodell took a strong position against investment in DFS by the league itself. However, The Kraft Group (owned by Patriots owner Robert Kraft) and Legends Hospitality (owned by Cowboys owner Jerry Jones and the New York Yankees) have been added to the lawsuit.

The action also names as defendants other corporate/media investors including NBC Sports Ventures, Turner Sports, Time Warner, 21st Century Fox, Fox Sports Interactive Media.

The lawsuit also targets VISA, MasterCard, and American Express as facilitators of the allegedly illegal gambling transactions and various companies (including PayPal) as the processors of payments for illegal gambling transactions.

Deadspin.com has posted the full lawsuit (technically, the investor defendants are being added via an amendment to an existing lawsuit against DraftKings and FanDuel), which contends that DraftKings and FanDuel maintain illegal gambling operations in Florida, and that the investors negligently failed to realize that they were pumping money into illegal gambling operations.

The lawsuit includes two counts under the civil Racketeering Influenced Corrupt Organizations Act (“RICO”), a law that was passed in 1970 to combat organized crime. Which, if nothing else, gives the litigation a more ominous feel.

Typically, there’s no question that the folks engaging in organized crime are committing crimes. In this case, the primary fight will be whether DFS violates criminal laws in Florida or elsewhere. The ultimate question becomes whether these various billion-dollar organizations guessed right or wrong when it came to the legality of playing daily fantasy sports for money in Florida or other states where DraftKings and FanDuel have been doing business.

8 responses to “New DFS class action targets sports leagues and other investors

  1. The law is so unclear on this one and you need criminal intent to prove this. Already states like Massachusetts say that this is not criminal activity, so this is a somewhat bogus class action suit. If Florida wants to ban it, so be it.

  2. I highly doubt these companies “guessed” about whether their business models were right or wrong. It is also interesting that other articles show where they took money from five states where they say they don’t do business due to the laws in those states.

    My guess- and it is a guess- is they determined that the reward outweighed the risk even though the lawyers advised them they were probably operating an illegal business. Very doubtful the states will make them return all profits. Also, doubtful the individual investors (the original ones) will have to give back their ill-gotten gains (if it is ruled illegal).

    As many others have said- common sense dictates, if online poker is illegal, this has to be illegal.

  3. It’s gambling, no doubt about it. The time is running out on these companies and there investors. Hopefully soon we won’t have to see those horrible ads every 10 seconds any longer. And the people who have backed these should be prosecuted, just like all the mobsters who have been sent to jail for being bookies, no difference at all.

  4. richrod12345 says:
    Nov 22, 2015 10:39 AM
    It’s gambling, no doubt about it. The time is running out on these companies and there investors. Hopefully soon we won’t have to see those horrible ads every 10 seconds any longer. And the people who have backed these should be prosecuted, just like all the mobsters who have been sent to jail for being bookies, no difference at all.
    =========================================

    Gamble is betting on an outcome based on chance, like the lottery, craps, roulette, baccarat. There is no skill needed to win at those games.

    Its funny how all the wordings from all these lawsuits now have been changed to be reflect even if the contest is still not based on all chance. Gee that’s ironic because these clowns looked up the actual definition of to gamble.

    DFS requires mostly skill, not chance.

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