A proposed nationwide class action lawsuit has been filed against a major online sports betting company, alleging that it operates an illegal online sports betting business in states where traditional online sportsbooks are prohibited. The complaint argues that the company presents sports wagers as federally regulated event contracts to sidestep state gambling laws, while leading customers to believe the product is legally distinct from conventional sportsbooks. The lawsuit claims that this practice has resulted in significant financial losses for consumers. The company's actions are seen as an attempt to evade state gambling laws and regulations.
The lawsuit was brought by a California resident who claims to have lost money using the company's platform. The plaintiff argues that the company failed to inform him that its product was essentially an unlicensed sportsbook, and that he was not aware of this when he placed his wagers. The complaint also alleges that the company relies on its established brand, technology, and customer base to market its product in states that have not approved online sportsbooks. This strategy is seen as a way for the company to circumvent state laws and regulations.
The lawsuit seeks to represent consumers from several states, including Alabama, California, Florida, and Texas, and alleges that thousands of consumers may be eligible to join the class. The complaint claims that the company's actions have resulted in damages exceeding $5 million under the Class Action Fairness Act. The lawsuit also alleges that the company has been unjustly enriched through its unlicensed sportsbook and seeks restitution, disgorgement, and recovery of alleged wagering losses.
The complaint cites statements made by the company's executives, including its CEO, which suggest that the company's product is essentially the same as its regulated sportsbook. The CEO is quoted as saying that customers do not understand the difference between the two products and that they serve the same customers in the same live moments. These statements are seen as evidence that the company's product is an attempt to extend its sportsbook into markets where licensed online betting is not available.
The company launched its standalone platform in 38 states under the oversight of the Commodity Futures Trading Commission, describing it as a platform for trading event contracts rather than placing sportsbook wagers. However, the complaint alleges that this platform is essentially an unlicensed sportsbook, and that the company has been operating it in states where online sports betting is not allowed. The company has not responded to the allegations at the time the lawsuit was filed.
