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Over a month ago, a group of DraftKings customers filed a lawsuit against Major League Baseball, the Houston Astros and the Boston Red Sox over the cheating scandals that have rocked professional baseball.
This week, the Houston Astros filed a response to the lawsuit, calling the claims frivolous as the team is not contractually bound to fans under any law. The response mirrors other lawsuits filed by fans in the past who have claimed fraudulence in boxing and other sports. Those previous lawsuits were denied and dismissed.
At the heart of the customers’ arguments is that customers of DraftKings had no previous knowledge that the Astros players were cheating. But again, while the integrity of the sport is implied by the leadership of MLB, it is not guaranteed to fans and those that bet on their games.
Lawyers for the Astros have countered the customers’ claims by stating that the statistics provided by DraftKings were correct and in no way tainted by the discovery of wrongdoing by the club.
The lawsuit could possibly serve as a template for possible future litigation as sports betting grows in the United States and the probability of other malfeasance in professional sports becomes higher with more technological scrutiny.
DraftKings player Kristopher Olson filed the original lawsuit against MLB and the teams and in his 52-page brief, his lawyers argue that all three entities deceived customers through unlawful business practices at the detriment to him and other players who lost money on the company’s games.
An interesting wrinkle to Olson’s lawsuit is the reasoning that DraftKings players are owed back damages because MLB owns a stake in the daily fantasy company and therefore, has a contractual obligation with the company’s players.
Major League Baseball and DraftKings have a partnership that gives the league a single-digit stake in the daily fantasy business. But that agreement could give daily fantasy players like Olson a potential foothold in the proceedings due to MLB’s ownership stake.
At the time of the deal in early 2015, MLB Commissioner Rob Manfred said, “I think there is a clear legal line, and quite frankly, we’ve spent some considerable effort and money to make sure we knew where DraftKings was in relation to that line. We’re very comfortable with the idea that its fantasy.”
The Red Sox have been lumped together with the Astros because they have also been shown to use technology to steal signs in games like Houston, but by all accounts, their infractions may be far less than the trash can banging scheme that the 2017 World Series champions concocted over the course of that season.
For Olson, the Red Sox also used deceptive tactics to influence the outcome of games and they are no different, from a liability perspective, than the Astros.
But the Astros and Red Sox might not be the only teams that eventually become part of the lawsuit as Sports Illustrated’s Tom Verducci found that as many as eight teams in MLB were in direct violation of the rules due to electronic sign stealing.
With the league and team’s response now filed, the case will be heard by a judge representing the U.S. District Court for the Southern District of New York. If Olson gets his way, he’ll team up with other similar lawsuits and create a class action involving other DFS players.
Olson is asking for $5 million in damages to be shared by those players who lost money on contests directly related to the 2017 Houston Astros and 2018 Boston Red Sox. The lawsuit does not name DraftKings as a defendant.
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