Fantasy Sports Sites Face Patent Lawsuits

LAS VEGAS (CN) - Tech companies claim DraftKings' and FanDuel's fantasy sports betting sites violate seven patents, and sued the companies in separate federal complaints.

Las Vegas-based CG Technology sued FanDuel on April 7 and DraftKings the next day. Co-plaintiffs in both lawsuits are Interactive Games Ltd., of London, England; and Interactive Games LLC, incorporated in Nevada with its principal place of business in New York City.

CG Technology, formerly known as Cantor Gaming, operates several race and sports books in Las Vegas and provides statewide mobile and online gaming, race and sports-betting applications that Nevada residents and visitors can use to place race and sports bets and gamble online, so long as they are within Nevada's borders.

CG Technology says it specializes in providing "secure, scalable mobile technology and risk-management solutions to integrated resorts, gaming partner, race and sports books, and lottery" firms.

Its technology is compatible with Android and Apple phones and mobile devices, and allows bettors to gamble online or using mobile technology, which pinpoints their location in Nevada to ensure the wagers are legal.

It says FanDuel and DraftKings advertise and operate in Nevada, and are trying to gain regulatory approval to provide daily fantasy sports contests for a fee.

They claim FanDuel and DraftKings violate at least seven patents, and ignored cease and desist letters and efforts to negotiate a settlement.

Patents at issue transmit identification code and game control signals to a processor, enabling firms to identify players and approve them; allow the fantasy sites to monitor games, track results, generate user pay records, and provide other information.

The tech firms seek an injunction, damages for patent violations and increased damages for willful infringement. They are represented in both cases by Molly Rezac with Ogletree, Deakins, Nash, Smoak & Stewart, who did not immediately respond to email and telephone requests for comment Monday.

Several states, including Nevada and New York, have prohibited FanDuel and DraftKings as unregulated gambling. States' regulatory actions increased when it was alleged that employees used inside information to get an edge in the gambling.

Both companies are trying to gain regulatory approvals.

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Email *

Submit