Here comes the fantasy-sports litigation

Game of skill, or game of chance? “The [class-action] suit, filed in Manhattan federal court on behalf of FanDuel and DraftKings players nationwide, accuses Visa, MasterCard, American Express and other defendants of participating in a racketeering scheme to facilitate illegal gambling operations.” [Alison Frankel, Reuters]


  • The suit is the first to bring claims against credit card companies and card issuers on behalf of FanDuel and DraftKings customers, according to plaintiffs’ lawyer Hunter Shkolnik of Napoli Shkolnik. “FanDuel and DraftKings would have been just a nice idea for these scammers if they didn’t take credit cards,” Shkolnik said.

    Speaking of scammers and racketeering, does Shlolnik take credit cards too?

  • 1. Fanduel is a gambling enterprise.

    2. Draftkings is a gambling enterprise.

    3. I have no opinion as to whether the gambling enterprises are or should be legal.

    4. There is probably no valid racketeering suit. However, discovery of some sort might be useful. I would much rather that these matters be handled by the AGs or USDOJ than individuals.

  • When a company is advertising exactly what it is doing nationally, it is ridiculous to hold the credit card companies responsible. If you’re so sure that those fantasy sports companies are doing something illegal, the government should charge them (and not just send a letter), and get a court order to serve on the payment providers. MasterCard is not an attorney general. They are not experts on what the law is in all fields and in all 50 states, and they shouldn’t be expected to be.

    And this is especially ridiculous in the context of this particular lawsuit, which is a class action brought by a customer. MasterCard should have known this was illegal gambling, but not the people actually making the bets? How does THAT work?

    I don’t think the parts where employees of one fantasy company would bet on another fantasy company’s site are going to mean much. If company A’s employees bet at company B’s site, that doesn’t hurt company A’s bettors. And company B probably doesn’t even know who company A’s employees are; but even if they did, why would they have to exclude them? If there was some actual agreement between the two companies that would be one thing, but I don’t think that was alleged.

    According to the lawsuit, there is a law in New York that pretty much says all gambling debts are void. Unless they’re misrepresenting that law, I think it does give the class a fairly good chance of winning at least something if it goes to trial. But then, doesn’t that mean that all winners would also have to pay their money back?

    • “MasterCard should have known this was illegal gambling, but not the people actually making the bets? How does THAT work?”

      That’s not quite the argument that they are going to make.

      Legal casinos get sued all the time by individual gamblers who have lost a lot of money then turn around a sue claiming:

      1.I have an addiction to gambling, I can’t help myself
      2. The casino did or should have known 1.
      3. The casino had a legal obligation to cut them off from feeding their addiction before they lost their life savings

      Alcoholics have sued bars on similar grounds

      This is how it is going to go against the credit card companies.

      1. We have a gambling problem and we can’t help ourselves
      2. The credit card companies know there are people with addictions to gambling
      3 Gambling is illegal in many jurisdictions
      4 The credit card company has an obligation to protect us from ourselves.

      Of course the only way the credit card companies can accomplish 4 is to cut off the gambling site from payments completely. They can’t do it on a transaction by transaction basis, because transaction authorization/approvals are handled not by the credit card company but by the issuing bank.