LOS ANGELES (CN) — Already under fire as unregulated gambling, fantasy sports site FanDuel faces a new class action claiming that professional gamblers wielding bots and algorithms take over the “million dollar” games and rake in most of the winnings.
Lead plaintiff Lee Sobel says he ponied up $200 to join FanDuel in October last year, lured by its misleading advertising. He sued the company on April 8 in Superior Court.
FanDuel, a Web-based fantasy sport game launched in 2009, allows players to build virtual teams from varying athletic leagues. Players earn points based on athletes’ real-world statistics.
Sobel cites several ads in the lawsuit, including one from a man who claimed to have won $700,000 on FanDuel, another man who allegedly “turned $50 bucks into $31 grand in 2 weeks on FanDuel,” and that “Even a novice can come in and spend 1 or 2 dollars and win 10, 20 thousand dollars.”
All those ads ran on ESPN channels, Sobel says, though the network is not a party to the lawsuit. Sobel calls the ads misleading.
“FanDuel’s television and Internet ads are misleading and misrepresent or omit important information to potential FanDuel members,” the complaint states. “The advertisements misrepresented and omit the true facts regarding FanDuel being an unlicensed gambling site in violation of California law, where players encounter unreasonable risk, and in the case of large ‘million dollar’ fantasy games, and in many head-to-head games, where professional players using algorithms and ‘bots’ enter hundreds of entries in one game (at considerable risk and cost) to gain an unreasonable and, at times, overwhelming and unfair advantage over the individual player, like plaintiff, who does not employ these strategies and advantages.”
He adds: “In its advertisements, FanDuel does not inform potential members of the unreasonably long odds they face playing fantasy football against professional players, using algorithms and ‘bots,’ who win a vast majority of the money available on FanDuel.”
New York, Nevada and Illinois ruled in 2015 that fantasy sports should be considered gambling.
Indiana, Virginia and Massachusetts this year passed regulations declaring fantasy sports legal.
“We fully support sensible regulations to protect consumers and ensure sports fans nationwide can continue playing the games they love,” FanDuel said in March after Massachusetts Attorney General Maura Healey announced tighter rules on fantasy sports in the state.
The NCAA last year banned FanDuel and its nonparty competitor DraftKings from advertising at any NCAA championship event.
Both companies agreed this month to suspend college fantasy contests nationwide.
FanDuel holds partnerships with the National Football League and National Basketball Association.
The company, which has offices in New York, Los Angeles, Orlando, and Edinburgh and Glasgow, Scotland, reported that it paid out $560 million in 2014.
During peak NFL season, the company says, it receives 15 million entries weekly.
“Whether you play against your friends in a private league or in a public league, you can win cash, once-in-a-lifetime experiences or bragging rights, every night,” the company says on its website.
FanDuel did not respond to a request for comment Wednesday.
Sobel seeks class certification and punitive damages for unfair competition, false advertising, negligent misrepresentation and violation of California’s Consumers Legal Remedies Act. He is represented by Christopher Hamner, who could not be reached immediately for comment
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