Federal Class Action Lawsuit Filed Against DraftKings, FanDuel - NBC Bay Area

Federal Class Action Lawsuit Filed Against DraftKings, FanDuel

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    Federal Class Action Lawsuit Filed Against DraftKings, FanDuel
    File--AP
    In this Sept. 9, 2015, photo, an employee in the software development department of DraftKings, a daily fantasy sports company, walks past screens displaying the company's online system stats in Boston. The daily fantasy sports industry is eyeing a breakout season as NFL games begin. And its two dominant companies, DraftKings and FanDuel, are touting lucrative opening week prizes to try to draw more customers as more competitors pop up.

    Fantasy sports betting sites DraftKings and FanDuel have been hit with a federal class action lawsuit.

    The suit, which lists the plaintiff as Adam Johnson, alleges DraftKings and FanDuel fraudulently misrepresent contestants’ chances of making money and the fairness of the games, don’t disclose the possibility of employees using inside information to improve their odds of winning jackpots and violate Massachusetts, New York and Kentucky consumer protection laws.

    The suit seeks to order the daily fantasy sports sites to reimburse players for “all monies wrongfully obtained” and cease any deceptive advertising.

    DraftKings and FanDuel told customers its employees weren't allowed to play on their sites; however, they "omitted the material fact that they were allowed to play on other sites and that other sites' employees were allowed to play on their site," according to the suit, which was filed in New York Thursday.

    Wednesday, FanDuel announced it was banning all of its employees from participating on other daily fantasy sports operators' sites for money and the launch of an internal investigation following reports that a DraftKings employee may have had access to valuable data that gave the employee an unfair advantage before winning a $350,000 contest on FanDuel.

    Necn’s parent company, Comcast, and sister company NBC Sports Group are among investors in FanDuel.