Deal or No Deal? DFS Company Wants Sponsorship with NHL Team Void Because DFS is Not Legal

On June 1, 2016, Emil Interactive Games, LLC, the company behind the daily fantasy sports operation “Draft Ops,” filed a memorandum in support of their Motion to Dismiss a breach of contract suit by the NHL’s Minnesota Wild. In asking a Minnesota federal judge to toss the case they assert the fact that daily fantasy sports has become a contentious issue in many states and has come under fire having been banned outright in five states and consequently the contract should be voided.

In its complaint, the Wild allege that they and Emil entered into a sponsorship agreement, but Emil had failed to make the monthly payments accruing a balance owed of $1.1 million. The Wild filed suit in state court on May 5 and the case was subsequently removed to federal court on May 25. The Wild request the $1.1 million in damages plus 1.5 percent interest per month, along with $50,000 in damages for their loss of sponsorship money and opportunity to seek other sponsors.

In its memorandum filed Wednesday, Emil contends that because a bill to regulate daily fantasy sports failed to pass, making daily fantasy sports illegal in Minnesota, the contractual relationship between the parties changed. Emil maintains that as a result the sponsorship agreement is void as operating their business in Minnesota leaves the company open to violations of federal law. Thus, because engaging in daily fantasy sports is illegal in Minnesota any contracts to promote it are therefore void.  Further, Emil argues that there is a clause in their contract with the Wild and the Xcel Energy Center, where the Wild play their home games, that allows for contract termination if the NHL or the state ever determine daily fantasy sports are illegal.

Attorneys for the Wild responded on Thursday calling Emil’s arguments in their memorandum “crazy.”

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