Buried Clause Doesn’t Save Website From Fraud Claims

The disgruntled online DraftKings and FanDuel players are alleging bonus fraud, “insider” claims (alleging that company employees used inside information to place wagers on other daily fantasy sports sites), illegal gambling and false advertising claims. The complaint says that the companies advertise the games as being “100% percent legal” but that they are, in fact, running illegal internet gambling operations.

As USATODAY  reports, daily fan sports sites DraftKings and FanDuel have been sued by athletes and users and declared illegal under the laws of a handful of states in recent months. But arguably the biggest blow came as a major payment processing company declared it would no longer process payments for daily fantasy sites in the U.S. beginning next month.

Payment processors such as Vantiv, PayPal and PaySafe — along with credit card companies — have been targets of lawsuits seeking class action status filed on behalf of daily fantasy sports players.

While DraftKings and FanDuel want to compel arbitration in this litigation, consumer protection attorneys at  Napoli Shkolnik PLLC argue that the arbitration clause is unenforceable and that the companies cannot establish that their customers gave fully informed consent.

As the consumer’s opposition to the companies states, “They had to check a box indicating they agreed to the terms of use, but were not required to actually read or even see them before indicating this agreement, and the check box appears before the link to the terms of use. The arbitration clause was buried halfway through a 6,000 word, single spaced web page where it is either conspicuous nor understandable.”

Additionally, the arbitration clause is further contradicted as another clause elsewhere in the Terms of Use agreement requires that all claims against DraftKings be brought in Massachusetts court.

Hunter Shkolnik, a team member on the Plaintiff’s Lead Council was cited in a Law360 article on the case.

“I am honored by the Court’s decision and I am excited to represent our clients’ interests and give them their day in court,” says Hunter Shkolnik. “Our firm has the resources and experience to handle this type of complex litigation.”

Hunter, a senior partner at Napoli Shkolnik, PLLC has been named Co-lead counsel in the case.

FanDuel and DraftKings allegedly operate illegal online sports betting businesses that accept wagers from persons across the nation.  Therefore, Napoli Shkolnik PLLC filed a class action lawsuit on behalf of persons who sustained ascertainable losses arising out of these illegal online sports betting businesses.

If you would be interested in reading more on the case against FanDuel and DraftKings, The case is In re: Daily Fantasy Sports Litigation, case number 1:16-md-02677, in the U.S. District Court for the District of Massachusetts and you can read the complaint in its entirety here.