Fantasy Sports, No Sure Bet

Fantasy sports

According to USA today, litigation around daily fantasy sports (DFS) now includes as defendants the NBA, MLB, NHL and MLS. Companies owned by New England Patriots owner Robert Kraft, New York Knicks owner James Dolan and Dallas Cowboys owner Jerry Jones were also included.

Promoting illegal gambling

“By virtue of financing, promoting and endorsing (the DFS companies’) 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,” the complaint states. The attorney for the plaintiffs said “People are going to think, ‘Wow, if MLB and NHL and NBA are behind this, how bad could it possibly be?’ But the reality is that they’re 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.”

Entertainment, not gambling

DFS contents that it is a lawful form of entertainment. No court has ruled, at least yet, that DFS gaming is unlawful under a state’s law. The Attorney General of New York, in a case to be heard in court soon, opined that it was gambling, and the U.S. Attorney General has launched an investigation, but no cases filed to have led to a judicial determination that DFS is, in fact, unlawful.

The takeaway

Professional sports leagues and other defendants can argue that they do not have controlling interests in DraftKings and FanDuel, and thus they played no role in any unlawful conduct, if any, committed by DFS companies, a defense bolstered by the fact that no league or team owner has a controlling interest in DraftKings or FanDuel. Leagues might also protect themselves by requiring that they be indemnified through their contracts with DraftKings and FanDuel protecting the leagues from any costs and damages associated with litigation. Congress and state legislatures could intervene in ways that favor, or harm, DraftKings and FanDuel. The over/under on this one has yet to be determined, but either way, it is no sure bet at this point.

Thank you.

Michael K. Gillis, Esq.

GILLIS & BIKOFSKY, P.C.

1150 Walnut Street

Newton, MA 02461

Phone: 617-244-4300

Fax: 617-964-0862

E-mail: mgillis@gillisandbikofsky.com

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