Daily fantasy sports companies FanDuel and DraftKings have had a rough go of it over the past few months, having faced new rulings in several states where DFS activities are being considered illegal gaming. Several states have begun to review the activity after New York Attorney General decided that DFS is illegal in the state, creating a firestorm of attorney generals looking at the contests.
Now, we have learned that a resident of Oregon has filed a lawsuit against the two companies to try and seek compensation for losses, alleging that the companies were operating illegally. Brandon Peck filed the class-action suit in federal court of Portland against the two brands, DraftKings and FanDuel, claiming the companies offered services illegally and the amounts wagered and lost were ‘wrongfully lost’.
The suit was filed this past Monday and asks the court to stop the companies from operating in Oregon and have the brands pay back players double the amount they lose, with the lawsuit seeking over $5 million. This suit is the latest in a slew of activity against the two companies, with over 30 lawsuits having been filed against the two in more than ten different states.
In the suit, players allege that players were tricked into participating in illegal gambling activities that gave an unfair advantage to employees of the companies who also took part in the daily contests. With DFS, players create hypothetical teams can earn points based on how their players do in actual games. FanDuel and DraftKings offered weekly and daily contests. Players who do well will earn money from the brands.
Attorney Thomas D’Amore argues in the federal suit filed in Portland that both sites are in violation of the Oregon law, which prohibits gambling and betting. D’Amore does cite actions taken by other states in the lawsuit, noting the order for the companies to remove services from Nevada by the Nevada Gaming Control Board.
Both companies argue that their fantasy sports options are not gambling but considered a game of skill, not one of chance. This would exempt the activity from the 2006 federal law which prohibits online gambling. Peck’s representation argues that the games do not require skill and that the outcomes are largely determined by chance and what is considered ‘return casino-type odds’. D’Amore even stated that customers of the companies lack ‘rudimentary understanding of sports, or getting strategy in general’ but place wagers and lose and win based on pure luck.
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