DraftKings and FanDuel Consumer Lawsuits

Arbitration is a way to resolve legal disputes outside the courts. Originally created to settle issues between companies, arbitration is today increasingly used between companies and individuals. Empowered by court decisions in favor of arbitration, corporations routinely place arbitration clauses deep within consumer and employer contracts. Many of these clauses also prohibit class action lawsuits. Not all is lost, though.

Daily fantasy sports are big business. The industry generated around $2.6 billion in entry fees in 2015 and is expected to reach $14.4 billion in 2020, according to the New York Times. Participants compete for prize pools that pay the winner up to $2 million. DraftKings and FanDuel generate tens of millions of dollars in revenue and attract hundreds of millions more in investments.

Before they can participate, players must agree to DraftKings’ and FanDuel’s terms of service. Unknown to most, the terms include provisions that require mandatory arbitration of disputes.

As it turns out, disputes did arise—a lot of them. DraftKings and FanDuel were hit with more than 80 class-action lawsuits. A consolidated class action complaint containing 27 claims under state and federal laws alleged, essentially, that DraftKings and FanDuel are illegal gambling enterprises that misled consumers and gave employees an unfair advantage using inside information. The companies moved to compel arbitration, citing their service terms. A judge recently ruled that the agreements are valid and the claims must be arbitrated.

DraftKing and FanDuel users have the right to arbitration, but they should not go it alone. You wouldn’t go to court alone, generally, and arbitration is no different in that sense.

Having the right lawyers on your side can make all the difference. Morgan & Morgan’s experienced arbitration lawyers represent consumers on a contingency-fee basis. You pay nothing unless and until we win your case. Learn more during a free case evaluation.