A new class-action lawsuit against companies who partnered with daily fantasy companies DraftKings and FanDuel has been filed and names the NBA, NHL, and MLB, groups led by Jerry Jones, Robert Kraft, and James Dolan, in addition to media companies, credit card companies, and banks in the suit. SI reports that Antonio Gomez and John Gerecs are represented by prominent Florida lawyer Ervin Gonzalez and are suing, well, everyone affiliated with the two companies in South Florida’s U.S. District Court:
The defendants include:
- The National Basketball Association, Major League Baseball Ventures, National Hockey League Ventures and Major League Soccer
- The Kraft Group (owned by New England Patriots owner Robert Kraft), Legends Hospitality (co-owned by Dallas Cowboys owner Jerry Jones and the New York Yankees), and MSG Sports and Entertainment (owned by New York Knicks owner James Dolan)
- Turner Sports, Time Warner, NBC Sports Comcast Ventures, 21st Century Fox, Fox Sports Interactive Media
- Visa, MasterCard and American Express
- J.P. Morgan, Capital One Bank, Google Capital, Piton Capital and Scottish Investment Bank
- PayPal, Paysafe and Vantiv (payment processors)
- DraftKings, FanDuel and Jason Robins
Gonzalez’s basic theory of liability is that DraftKings and FanDuel have engaged in illegal gambling and deceptive practices under Florida and federal laws and that the banks, leagues and other companies negligently failed to realize that they were investing and partnering with illegal gambling operations. These other companies, according to Gonzalez, now owe damages to Gomez, Gerecs and, if the lawsuit is later certified as a class action, thousands of other aggrieved DFS customers
We’ve seen lawsuits against both companies before (even one led by NFL players) but this is the first time that the leagues and media companies who have promoted them have gotten involved in a suit. Florida law states that betting even on skills-based contests (which is the designation upon which both companies’ defenses rest) is illegal, which is why the case’s filing in Florida is important.
From the report:
Gonzalez’s legal claims are primarily based on theories of negligence, breach of contract and—most intimidatingly—racketeering. Indeed, the complaint describes DraftKings and FanDuel as the “ringleaders” for a mafia-style operation where investors who “pumped millions of dollars into [DraftKings and FanDuel] provided legitimacy to the illegal gambling that was occurring and allowed [DraftKings and FanDuel] to conduct unprecedented advertising to attract more bettors.”
Interestingly, if this suit progresses, officials from the named parties could be called to testify and be forced to reveal financial information about how much money FanDuel and DraftKings paid for advertisements. The inclusion of credit card companies in the suit could also trigger a snowball effect where Visa and others cancel their relationships with the two companies. While this wouldn’t be a directly rule DFS illegal, it would make it practically unusable.
Update (3:19 p.m.): Here’s the full lawsuit.
Photo via AP; Illustration by Jim Cooke