Fantasy football companies sued in fraud class action

Posted on: October 21st, 2015 by Steve Larson

FootballA class action lawsuit has been filed in federal court accusing two of the largest daily sports fantasy websites, DraftKings and FanDuel, of misrepresenting the fairness of their online sports fantasy contests.  The complaint alleges that employees of both companies may have participated in contests offered by competitor sites with the unfair advantage of using their company’s proprietary data.

The lawsuit claims that “DraftKings performs analytics to determine winning strategies, return on investment of certain strategies, and even how lineups on FanDuel would do if they were entered into DraftKings contests.” In other words, DraftKings employees are accused of using insider information to win against FanDuel customers.

The lawsuits come on the heels of a broadly publicized scandal stemming from the alleged use of inside information and the increased scrutiny on the largely unregulated of daily sports fantasy businesses.  Also, New York Attorney General Eric Schneiderman announced an inquiry into DraftKings and FanDuel to determine if employees of those companies used proprietary data to gain unfair advantages in daily sports fantasy competition hosted by competitors. Specifically, Schneiderman sent letters to FanDuel and DraftKings requesting lists of employees who collect player data and other relevant information.