A Florida attorney seems to have found the soft underbelly of the daily fantasy sports industry: its investors. Ervin Gonzales, representing two Sunshine State punters, has filed a class-action lawsuit that names among its defendants all the major sporting leagues, Jerry Jones, Robert Kraft, JP Morgan Bank, PayPal, Capitol One (“Who’s in your lineup?”) and so forth. All are accused of illegal gambling, and the plaintiffs allege that “DFS sites acted in a deceptive manner by luring average players into competition with industry employees who had access to insider information.” At the very least, this could make payment processors skittish about providing DFS-related services.
DraftKings has lawyered up in New York with some high-powered legal talent, namely former Al Gore attorney David Boies. Unlike DraftOps and DraftMVP, which have quit the Empire State, Boies has no plans to shrink from a confrontation with state Attorney General Eric Schneiderman. He is planning on ditching DraftKings’ habitual likeness of itself to poker. “First, neither the entry fee they pay, nor the prize that is rewarded, is determined based on an outcome. They pay a fixed entry fee to compete for a fixed prize,” Boies’ argument runs. “Second, even if this were a bet, it would be a bet on a contest of skill, the outcome of which the DFS player clearly influences.”
The crux of Boies’ argument is that there is a material amount of skill involved, which differentiates DFS from gambling. “The same people win repeatedly. That can’t happen if there’s a material degree of chance.” Boies will only have 20 minutes to make his case at tomorrow’s hearing but seems to be fairly itching for a full trial. Two other gaming attorneys argue that not only is DFS here to stay, so is either self-policing or state regulation and offer a primer on how to go about it.
Massachusetts Attorney General Maura Healey, meanwhile, summed up the DFS problem in two sentences. “We have a very robust regulatory legal framework that applies to casinos,” she said. “What we don’t have is a similar framework that applies to fantasy sports.” Bingo.
* The Penn National Effect has struck the Bay State, where Plainridge Park is on track to come in $24 million short of the $200 million in gross gaming revenues that were expected again. Attendance at New England Patriots games is blamed for scaring away patrons but the larger problem would seem to be that Plainridge is not generating enough return business, having fallen from $18 million in July to $13 million last month. The silver lining is that Plainridge is doing $280/slot/day, well above industry average.
Elsewhere in the state, MGM Resorts International is making headlines for having drawn a perfect score from the Human Rights Campaign‘s Corporate Equality Index for the fourth year running. MGM “goes above and beyond the call of duty, making commitment to equality a fundamental aspect of its corporate values,” said HRC Foundation Workplace Equality Program Director Deena Fidas. Springfield is to be congratulated on having drawn such a sterling corporate citizen to town.
