Two daily fantasy sports customers Saturday "e-filed a class action lawsuit in the U.S. District Court for the Southern District of Florida against approximately 50 companies and individuals that have either invested in DFS companies or facilitated DFS gaming," according to Michael McCann of SI.com. The defendants include the NBA, MLB, Ventures, NHL Ventures, MLS, The Kraft Group, Legends Hospitality, MSG Sports & Entertainment, Turner Sports, Time Warner, NBC Sports Comcast Ventures, 21st Century Fox and Fox Sports Interactive Media. The plaintiffs, Antonio Gomez and John Gerecs, "are represented by well-known Florida attorney Ervin Gonzalez, who authored the 132-page complaint." Gonzalez’ 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." Gonzalez "takes particular aim" at the NBA and MLB in the complaint, portraying them as "adopting a hypocritical stance on DFS." For sports leagues and team owners, "Gomez v. FanDuel" will likely "lead to a reevaluation of their relationships with DFS companies." The prospect of now "litigating the legality of DFS surely makes DFS less appealing." League officials are now "more likely to be subpoenaed and required to testify under oath about their business dealings with DraftKings and FanDuel" (SI.com, 11/21). ESPN.com's David Purdum wrote this suit "is believed to be the first to include the sports leagues." MLB, the NHL, The Kraft Group and Legends "have equity deals with DraftKings," while the NBA "has equity in FanDuel" (ESPN.com, 11/21). In N.Y., Andy Clayton noted Rangers and Knicks Owner James Dolan, via MSG, and the Yankees, via Legends, "have now been dragged into the mess that is threatening" the DFS industry (N.Y. DAILY NEWS, 11/22). USA TODAY's Rachel Axon noted the "ever expanding criticism and litigation" surrounding DFS sites "now includes a new target -- pro sports leagues." The lawsuit "is among more than three dozen that have been filed against FanDuel and DraftKings since October" (USA TODAY, 11/22).
TECHED OUT: DraftKings on Friday said that it "has adopted new technology that will improve its effort to block players from states where its contests are banned," partnering with Las Vegas-based firm GeoComply USA. In Boston, Dan Adams noted DraftKings' existing controls "were easily circumvented." The announcement "comes as the company faces the possibility of having to exclude customers in more locations because of opposition from state authorities" (BOSTON GLOBE, 11/22).
STATES YOUR CASE: The GLOBE's Woodward & Adams note New York Attorney General Eric Schneiderman has "accused DraftKings of receiving nearly a half-million dollars in contest fees from residents" of five states that have "highly restrictive gambling laws." Now, authorities in four of those states say that they "are looking into Schneiderman’s allegation, with one, Washington, launching a formal investigation." Additionally, Arizona Attorney General Mark Brnovich "has sent letters" to DraftKings and FanDuel "asking for records of any transactions with players from his state" (BOSTON GLOBE, 11/23). Meanwhile, in Baltimore, Jeff Barker wrote under the header, "Maryland Warily Eyes Fantasy Sports Boom." State lawmakers and regulators "are questioning whether reforms are needed" (Baltimore SUN, 11/22).
PROMO CODE REGULATION: In L.A., Michael Hiltzik wrote the fantasy sports industry "seems resigned to some level of regulation, including rules mandating the segregation of customer accounts, protection of customer financial data and barriers against underage players." The promoters "will resist tougher rules like those governing casinos in Nevada and New Jersey, such as background checks for owners and key employees." But their biggest challenge "may be persuading lawmakers that they're almost entirely based on skill" (L.A. TIMES, 11/21).
REGARDLESS OF CLASSIFICATION...: In N.Y., Bogdanich & Williams in a front-page piece write under the header, "Fantasy Sites Can Lead Addicts To A Ruinous Path: Gambling On A Dream Of Riches." The battle "is about more than just the letter of the law." In the unregulated world of fantasy sports, it is also about the "absence of safeguards to protect problem gamblers and younger adults." Fantasy games "appeal to the demographic most likely to develop gambling problems -- young men" (N.Y. TIMES, 11/23).
