Pro sports leagues a target of daily fantasy sports lawsuit – USA TODAY
The ever expanding criticism and litigation surrounding daily fantasy sports sites FanDuel and DraftKings now includes a new target â pro sports leagues.
The NBA, MLB, NHL and MLS were part of a motion that seeks to add them as defendants Saturday to a class-action lawsuit filed against the two DFS companies in U.S. District Court for the Southern District of Florida last month.
Media companies Turner Sports, NBC Sports Comcast Ventures and Fox Sports Interactive Media were also among the 51 companies or individuals named in the lawsuit that have either invested in DFS companies or facilitated gaming.
Companies owned by New England Patriots owner Robert Kraft, New York Knicks owner James Dolan and Dallas Cowboys owner Jerry Jones were also included.
The NBA and NHL declined to comment when contacted by USA TODAY Sports on Saturday. MLS did not immediately respond to a request for comment. MSG, owned by Dolan, also declined comment.
The lawsuit includes claims for negligence, breach of contract, unjust enrichment as well as civil RICO and civil conspiracy. Other defendants include FanDuel and DraftKings employees who played on DFS sites as well as top players, known as sharks, who claim most of the contest winnings with the help of computer software.
DraftKings and FanDuel in illegal gambling, the lawsuit claims, which the banks, leagues and other companies should have realized when they invested in the companies. The lawsuit faults the pro sports league investors â the NBA in FanDuel and MLB, MLS and NHL in DraftKings â for lending legitimacy to the businesses.
âBy virtue of financing, promoting and endorsing (the DFS companiesâ) illegal internet gambling enterprise to grow and flourish and also provided credibility and legitimacy to the enterprise thereby attracting more unknowing players to participate a customers in the illegal gambling enterprise,â the complaint states.
As an example of the NBAâs opposition to betting, the lawsuit points out that official Tim Donaghy resigned and plead guilty to betting on NBA games after an FBI investigation. It also cited MLBâs lifetime ban of Pete Rose for betting as an example that the league âstaunchly rejectâ betting on its games.
According to the complaint, the investors, which include the media companies, provided capital for FanDuel and DraftKings âto grow their website, engage in a massive advertising campaign to attract more users, user fees and bets, to grow the size of the illegal gambling pots, and ultimately provide legitimacy to the illegal internet gambling website.â
Ervin Gonzalez, an attorney for the plaintiffs and a partner at Colson Hicks Eidson, said the pro sports leagues and media investors were negligent in their vetting of the DFS companies.
âAnybody that looks at this and says itâs not illegal gambling is either naÃ¯ve or has a big interest in fantasy sports being successful because theyâre going to make a lot of money,â Gonzalez said.Â âPeople are going to think, âWow, if MLB and NHL and NBA are behind this, how bad could it possibly be?â But the reality is that theyâre causing a lot of young men to become addicted to gambling using money that they should be using to promote their education or helping their families.â
The Florida lawsuit now includes credit card companies, banks and payment processors. Visa, MasterCard, American Express, J.P. Morgan, Capital One and PayPal are among the named defendants.
Before the start of the World Series in October, MLB commissioner Robert Manfred said he did not thinkÂ daily fantasy sports constituted gambling.
âWe did thoroughly investigate the games that were available on the site, that was a major factor in terms of selecting a partner in the fantasy space,â he said then. âAnd we were completely comfortable with the idea that those games were consistent with the existing federal law.â
The lawsuit in Florida is among more than three dozen that have been filed against FanDuel and DraftKings since October. The companies are currently in litigation in New York, where Attorney General Eric Schneiderman has determined they are illegal.
He initially issued a cease and desist letter earlier this month, prompting the DFS companies to file a lawsuit against him in New York Supreme Court. He responded with a lawsuit of his own on Tuesday and is seeking a preliminary injunction to prevent them from operating in the state.
A hearing is set for Wednesday before Judge Manuel Mendez.
Already this week, the payment processors and banking companies became subject to their first lawsuit, which was filed in U.S. District Court for the Southern District of New York.