A 33-page lawsuit was filed last week against three DFS platforms operating in Massachusetts. The lawsuit accuses the trio of accepting illegal sports wagers under the guise of pick’em parlays.
Class Action Lawsuit
Plaintiff Joseph P. Curran filed a lawsuit against PrizePicks, Underdog, and Yahoo Fantasy Sports in Essex County Superior Court last week seeking damages equal to triple the total amount bet on the markets by Massachusetts customers through March 2024. The suit alleges that the peer-to-house parlay style pick’em wagers were nothing more than illegal sports bets.
“Mr. Curran has standing to bring this action as plaintiff under Mass. Gen. Laws ch. 137, § 1, which provides that if a person having a claim under the statute ‘does not within three months after such loss, payment or delivery, without covin or collusion, prosecute such action with effect, any other person may sue for and recover in tort treble the value thereof,’” per the lawsuit.
Jason A. Zweig of Bartko LLP is the attorney of record for Curran, and the legal action further states, “In actuality, while Defendants may have some offerings which are considered Daily Fantasy Sports, until March 2024 (and possibly beyond), they also offered sports wagers. However, Defendants offered and accepted sports wagers in Massachusetts illegally because they were never registered in Massachusetts as entities that can accept such bets.”
Curran has announced he will donate any legal remuneration to charity.
Blurred Lines
The lawsuit filed against PrizePicks, Underdog, and Yahoo Fantasy Sports is not uncharted waters in the world of DFS platforms that often blur the lines between fantasy sports and bookmaking. The issue in question is pick’em-style parlay prop bets where customers choose over or under in rushing yards, passing yards, etc. As in a traditional parlay, the more legs, the higher the reward.
However, the critical distinction in determining DFS from bookmaking is whether the wager is a peer-to-peer or peer-to-house model. Peer-to-peer is the DFS model where the operator merely takes a rake (percentage) of the entry fees and players compete against each other. Peer-to-house is the traditional bookmaking model where customers are playing against the house and 100% of the losses go to the DFS operator, as is the case when betting with a sportsbook.
The regulatory bodies in each state have the authority to set the rules and guidelines that DFS platforms must abide by. Naturally, traditional online sportsbooks are vehemently opposed to pick’em parlays unless they too operate a DFS platform, ala DraftKings and FanDuel.
DFS Under Fire
Several states have issued cease-and-desist orders to DFS operators that feature pick’em parlay style betting, but the threshold varies from state to state. Earlier this year, the Massachusetts Attorney General’s Office sent cease-and-desist letters to 10 DFS platforms operating in the Bay State that were offering pick ’em-style parlay games.
Yahoo Fantasy Sports, StatHero, and Parlay Play were three of those in question, but PrizePicks and Underdog Fantasy adjusted their format from peer-to-house to peer-to-peer, which assuaged the lawmakers.
Stacie Stern, Senior Vice President of government affairs and partnerships at Underdog Fantasy, said at the National Council of Legislators from Gaming States winter meetings, “I personally root for DraftKings, for FanDuel, and for PrizePicks, and obviously Underdog – all of us as competitors – to win over customers and continue to serve them with innovative and fun contests. I hope that we can find a way to find that middle ground and come together as an industry and just be a stronger voice for the consumer.”
