On October 8, Darren Rovell of ESPN.com reported that plaintiffs filed a class-action lawsuit in federal court in Manhattan. The lawsuit accuses DraftKings and FanDuel of negligence, fraud, and false advertising. On Monday, Rovell reported that plaintiffs filed a second lawsuit in Illinois.
Adam Johnson, a Kentucky resident, filed the first case. This came after it was revealed that the two companies allowed employees to enter contests on each other’s sites. The employees could compete for the available cash prizes. Johnson reportedly deposited $100 in a DraftKings account.
Rovell highlighted that the lawsuit claims DraftKings analyzes data. The goal is to identify winning strategies, assess the return on investment for specific approaches, and predict how FanDuel lineups would perform in DraftKings contests.
Even though representatives from the two companies said they have no comment on the litigation, both DraftKings and FanDuel are named as defendants.
Michael McCann, a Massachusetts attorney added more context in a piece for Sports Illustrated. He said that, according to Johnson, DraftKings employees have won at least $6,000,000. This was from playing FanDuel games over the last few years.
According to McCann, Johnson’s complaint raises seven counts. These include unlawful conspiracy, negligence, false advertising, deceptive practices, and consumer fraud. Johnson also wants his lawsuit to become class action on behalf of millions in daily fantasy site participants.
Rovell noted that this development occurred after a DraftKings employee posted player roster percentages. His subsequent $350,000 take in a FanDuel contest raised questions about inside information.
He pointed out that when a daily fantasy participant has a player on his or her roster who has a big game and few other participants have that player on their rosters for that contest period, top prizes are often won. The person could use that knowledge to his or her advantage if an employee of one of the companies had access to how many people selected a certain player.
