DraftKings has been subject to ongoing legal scrutiny and the legality of online fantasy leagues hosted by companies like DraftKings and FanDuel has been debated over the past years. Along with questions surrounding potential anti-gambling law violations, stakeholders are also questioning the truthfulness of the aggressive advertisement tactics employed.
In October 2014, Izsak expressed his displeasure with DraftKings advertising tactics by filing a class action suit in Illinois federal court. He claims that on September 1, 2014, he received an unsolicited text message from DraftKings, inviting him to play fantasy sport. Izsak claims a violation of the Telephone Consumer Protection Act (TCPA) and common law conversion.
According to Izsak, DraftKings used automated equipment to send unsolicited text messages en masse – without human intervention – to unsuspecting people, thus violating the TCPA. For his common law conversion claim, Izsak’s argues that the “text utilized his wireless data which made the data otherwise unusable and decreased the performance of his cellular phone.” He seeks an injunction to have DraftKings cease all unsolicited texting and award damages.
U.S. District Court Judge Wood denied DraftKings’s motion to dismiss the TCPA claim, reasoning that Izsak’s had alleged sufficient facts to support the conclusion that an automatics telephone dialing system was used. However, the judge granted DraftKings motion to dismiss the common law conversion claim, characterizing the decrease in his data stash as de minimis damages. The judge essentially maintains that his damages are “too small to warrant treatment in the judicial system,” comparing it to “lost ink, toner or paper.”
This case will move forward on the TCPA claim, whilst other states struggle to decide what to do with DraftKings and similar companies as Missouri has recently done.