DraftKings is now facing a class action lawsuit in New Jersey that seeks a refund for participants in its recently concluded Sports Betting National Championship (SBNC).
In addition to the refund of the $10,000 entry fee, the lawsuit filed on Thursday seeks additional damages for what it alleges was “mayhem” in the way in which bets were accepted or rejected, the general manner in which the SBNC was managed and the ability of some bettors to wager on the last event of the contest – Eagles vs. Saints – while others could not.
DraftKings spokesman James Chisholm told Sports Handle via e-mail, “DraftKings does not comment on pending litigation.”
You can read the entire complaint here.
SBNC rules ‘sparse in nature’
The suit was filed Thursday in the Superior Court of New Jersey – Atlantic Division — on behalf of SBNC participant Christopher Leong, a New York resident who claims in the lawsuit that:
- The terms and conditions (SBNC rules) were “sparse in nature”
- DraftKings never announced any specific betting limits for participants and accepted some large wagers “arbitrarily, capriciously and without explanation,” while rejecting others
- Credited playable winnings to some entrants’ accounts, allegedly those in attendance at the company’s viewing party in Jersey City, more quickly that those of participants at other locales within the state, such that it amounted to an “unconscionable commercial practice, a deception, a false pretense, a false promise, and a misrepresentation”
- “General operation of the SBNC in an arbitrary, capricious and uniformly haphazard manner…”
Betting limits are going to be significant. We'll be providing players with a general outline of risk per sport/market/day with their welcome packet but can answer some questions during the registration process. Shouldn't impact strategy at all on Sunday wrt final bets.
— Jon Aguiar (@JonAguiar) January 8, 2019
The suit notes that Leong received no part of the $2.5 million prize pool that awarded $1 million to the winner.
Entry fee breakdown
The suit also estimates that over $4 million was wagered by SBNC players. A portion of those funds came from the $10,000 entry fee that allowed $5,000 for “live-money” betting, $4,700 towards the $2.5 million prize pool and $300 raked for administrative costs. The suit estimates that players lost $334,000 of the $4 million to DraftKings –a hold of more than eight percent.
In general terms, a class action, class suit, or representative action is a type of lawsuit through which one of the parties in a group of people are represented collectively by a member of that group. The court generally must grant “class action” status to a lawsuit.
This filing, made by the Pennsylvania law firm of William H. Pillsbury and the Maryland firm of Maurice B. VerStandig, states that “a least five (5) other persons, all similarly situated, are prepared to join this case as named plaintiffs.”
Pillsbury declined to disclose to Sports Handle if he had reached out to third place SBNC finisher Rufus Peabody to join the suit.
I have no involvement with the class action at this time. https://t.co/E4thRcOtPx
— Rufus Peabody (@RufusPeabody) January 17, 2019
Third place instead of first?
Peabody, through a series of social media posts, says believes he would have taken home the $1 million first place prize if he had been able to access his winnings from the earlier Chargers vs. Patriots game. Peabody, as Leong, was not in attendance at the Jersey City viewing party, and was unable to access his winnings on a Patriots wager in time to bet the final event of the SBNC.
Balance $0.01. Game: started pic.twitter.com/0uPwb9Gcn3
— Rufus Peabody (@RufusPeabody) January 13, 2019
The event attracted 260 entrants who either won their way into the tournament or put up the $10,000 entry fee. The SBNC was extremely attractive to professional sports bettors because it produced an overlay of $1.2 million.
The top 25 finishers divided the prize money with all participants keeping all their real-money winnings.
Here’s a link to the final scoreboard showing who won what.
Peabody had gone “all-in” with his $42,875.30 winnings on the New England Patriots at -3.5 over the San Diego Chargers in an easy 41-28 Pats’ victory. That left the professional gambler as the tournament leader with $81,891.82.
But, with the delay in crediting funds to his account, Peabody had no money to bet the final game.
At last word, Peabody is still examining what legal recourse he has.
Various local media outlets are reporting that the New Jersey Division of Gaming Enforcement (DGE) is examining the event, but no official statement about an official investigation has been made public.