DFS Lawsuit in Florida Targets FanDuel and DraftKings

The major DFS companies will bring co-defendants to court that act as the corporation’s partnerships. Such major platforms hold several partners that include business relationships between NFL owners Robert Kraft of the New England Patriots and Jerry Jones of the Dallas Cowboys. The list contains 50 companies or defendants that are involved someway in the game’s operation.

The Defendants

The list is specific to facilitators or investors that have partnered with either DraftKings or FanDuel. However, some major 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 and 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

The Plaintiff's Case

The 132-page legal complaint was written and structured by Florida Attorney Ervin Gonzalez. The lawsuit outlines that both FanDuel and DraftKings operate in the state of Florida illegally and are breaking both state and federal gambling laws. Gonzalez also says that the case will include negligence damages from other corporations such as the banking companies and professional sports leagues involved in business partnerships with DraftKings and FanDuel. The overlaying assertion presented by the lawsuit is that the defendants were not only deceived through luring advertisements but were also beaten by DFS players that used “insider information.” With over 70 percent of contestants being on the losing side of the daily fantasy sports system, a successful case would open a revolving door for others to try and reclaim their lost money.

Although fantasy football still stands as the benchmark for DFS, the complaint focuses on the other two largest sports leagues, the NBA, and MLB. In regards to the overall point of the prosecuting party, Gonzalez considers all DFS equivalent to team betting. The Florida lawyer quoted,

The NBA recently held itself out as an entity that staunchly rejects betting on its games when former NBA official Tim Donaghy resigned from his job, but now has gone so far to legitimize FanDuel by having one of its employees, the NBA President of Global Operations, Mr. Sal LaRocca, serve on FanDuel’s Board of Directors and by becoming an official partner of FanDuel, launching the first “Official One-Day Fantasy Basketball game of the NBA.”

The same was said for the MLB, with Gonzalez noting that both leagues are hypocritical and have never embraced gambling such as this before. Although the argument is intimidating, the company defendants, FanDuel, and DraftKings, are falling back on the federal law that deems them a legitimate gaming operation of skill. However, state law takes precedence when it comes to gambling, even if it is seen as a game of skill.

Is DFS Still Legal in Florida?

Until there are amendments made to the current acting Unlawful Internet Gambling Enforcement Act, DFS remains legal in almost 90 percent of states in the Union. As for most state laws regarding gambling, the act is considered illegal if there is a significant amount of chance. For DraftKings and FanDuel to continue to operate, their systems will have to be inspected for relevant elements of chance. In addition to the UIGEA, Gonzalez believes that these corporations are even breaking the laws put in place by the IGBA or the Illegal Gambling Business Act of 1970 by conducting a “racketeering business.” Continue reading all the gambling laws in Florida.

The Case of the Defendants

The companies being served the lawsuit case will certainly not go down without a strong defense. As of now, the companies can still stand firmly behind the idea that they are operating with full legality under US federal law. Out of the couple dozen standing cases against daily fantasy sports platforms, none has resulted in proving that the game is, in fact, unlawful. It will take a complete investigation from multiple sources to change the existing law that favors the big time daily fantasy sports companies.

As for the many partners that hold business contracts with the DFS sites, they can also fall back on their position that they do not control the operation of the company. In the corner of the defendants, all investing parties, as well as partners, signed contracts for a lawful operation on US soil.

Conclusion

DraftKings and FanDuel certainly have their hands full in the upcoming legal battles they will face. Regarding the current claim that challenges DFS legality in the state of New York, lawyers for FanDuel and DraftKings are beginning to debate with NY Attorney General, Eric Schneiderman. It will be likely that the case will go on for some time before a permanent decision is made. Attorneys for both parties claimed the legal matter was “just getting started.”

The Attorney General’s cease and desist order for all daily fantasy sports sites is still being mulled over by Manhattan Supreme Court Judge Manuel Mendez. The judge is allowing fantasy sports platforms to continue to operate as he prepares his decision. However, the judge did not give a specific time for the completion of his written legal decision on the matter.

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