According to Sports Illustrated legal analyst Michael McCann, two Florida men have filed a class action lawsuit against DraftKings, FanDuel, and host of investors, including several major sports leagues. The NBA and MLS, as well as Major League Baseball Ventures and National Hockey League Ventures, were all specifically named as defendants to a suit based on negligence, breach of contract, and racketeering. Patriots owner Robert Kraft's company, the Kraft Group, and Legends Hospitality, a company jointly owned by Jerry Jones and the New York Yankees were also named, as well as several banks, credit card, and media companies.The lawsuit alleges that DraftKings and FanDuel operated as the "ringleaders" of a scheme where investors funded the companies and "provided legitimacy to the illegal gambling that was occurring and allowed [DraftKings and FanDuel] to conduct unprecedented advertising to attract more bettors." The various leagues, banks, and media companies are also accused of "negligently fail[ing] to realize" that they were funding and enabling illegal gambling.
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McCann has a good breakdown on the upshot of the suit, which could be interesting in Florida because state law there does not recognize a difference between luck and skill, which has been a major rallying cry for DFS companies. The suit also includes a fair bit of editorializing, specifically with respect to the sports league's involvement. In discussing the NBA, the complaint wonders aloud how a league that portrayed itself as anti-gambling after former referee Tim Donaghy resigned could now have NBA President of Global Operations sit on FanDuel's board of directors. Turning to MLB, the complaint asks why baseball would invest in daily fantasy sports when "it has always held itself out as a entity that staunchly rejects betting on its games." There is also, of course, a reference to Pete Rose's lifetime ban for betting on games.The complaint, filed in U.S. District Court in Southern District of Florida, echoes a suit filed in federal court in Manhattan earlier this week. On Friday, a suit was filed against Visa, Mastercard, American Express and others, on behalf of DraftKings and FanDuel players that alleged a similar racketeering scheme.[Sports Illustrated]According to [the suit], the leagues, banks and media companies that have invested in DraftKings and FanDuel "all served a common purpose: to make as much money as possible on the respective illegal Internet gambling fantasy sports betting games." At the same time, in the view of [plaintiffs' attorney Ervin] Gonzalez, DraftKings and FanDuel, "shared the benefit derived from the profits generated by the scheme to defraud through illegal Internet gambling activities."