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DraftKings sued over refund policy for canceled NFL game

Buffalo Bills quarterback Josh Allen (17) reacts as Damar Hamlin is examined during the first half of an NFL football game against the Cincinnati Bengals, Monday, Jan. 2, 2023, in Cincinnati. (AP Photo/Jeff Dean)

U.S. District Court in Boston has become home to a class action challenging the refund policy implemented by fantasy sports betting service DraftKings in the aftermath of the recently canceled Buffalo Bills-Cincinnati Bengals football game.

In a complaint filed on Jan. 9, plaintiff Simpson G. Turley alleges DraftKings owes him $8,000 in winnings from two fantasy football contests that he was leading in accrued points when the National Football League suspended the Jan. 2 Bills-Bengals game with 5:58 left to play in the first quarter. The NFL officially canceled the game on Jan. 5.

According to the New York resident’s lawsuit, Boston-based DraftKings implemented an unfair refund policy in response to the game’s cancelation.

“DraftKings arbitrarily chose to apply the statistics from the suspended Buffalo Bills-Cincinnati Bengals game (as played up to 5:58 remaining in the first quarter) to certain contests and offer payouts to customers leading in those contests, while refusing to apply the same statistics from the game to other contests and refusing to offer the same payouts to customers leading in those contests,” Turley’s suit states.

DraftKings officials did not respond to a request for comment.

According to the complaint, DraftKings determined that the “current, accrued points” based on player and team statistics from the Buffalo Bills-Cincinnati Bengals game would apply only in its “NFL Classic” contests. Accordingly, participants in NFL Classic contests would receive credit for points accrued up to the point the game was suspended. That meant that customers in those fantasy contests would receive their winnings.

Meanwhile, DraftKings allegedly took an entirely different approach in its “Showdown” and “Flash Draft” fantasy football contests, simply canceling those entries and offering customers refunds.

The suspension in the Bills-Bengals game occurred in response to 24-year-old Bills safety Damar Hamlin suffering a life-threatening injury on the field. After making a tackle, Hamlin collapsed from cardiac arrest and needed to be resuscitated by emergency responders. According to family members, Hamlin’s heart stopped beating twice, once on the field and later after being rushed to a Cincinnati-area hospital.

Hamlin appears on his way to making a remarkable recovery.

At the time the game was suspended, the plaintiff’s fantasy football team had allegedly accrued 23.35 points and was ranked in first place in the NFL Showdown $20K contest. Similarly, the plaintiff claimed that his fantasy team had accrued 25.35 points and was ranked in second place in NFL Showdown $15K.

In his complaint, Turley included purported screenshots of his DraftKings account showing that, when the Bills-Bengals game was suspended, he was in line for $8,000 in winnings from the two contests.

But in a Jan. 3 email, DraftKings gave the plaintiff the bad news that all entries for its Showdown and Flash Draft contests were being “canceled and refunded.”

Accordingly, rather than his $8,000 in claimed winnings, the plaintiff’s DraftKings account was simply refunded the $666 in entry fees he had paid.

The plaintiff alleges that paying off winning NFL Classic contestants while simply refunding entry fees to those who were in the money in Showdown and Flash Draft contests plainly violates DraftKings’ contest rules. According to the complaint, the rules for both Flash Draft and Showdown contests provide: “If the NFL declares a game ‘suspended’ then the statistics generated before the game is suspended will count in Game Sets containing said game.”

The suit further alleges that, due to the sheer volume of Showdown and Flash Draft contests involving players from the Bills-Bengals game, “hundreds, if not thousands, of participants in these contests were entitled to winnings at the time the game was suspended.”

The suit proposes a nationwide class consisting of those Showdown and Flash Draft contestants whose accounts indicated winnings were owed at the time the NFL suspended the game.

In addition to asserting a claim for breach of contract, Turley alleges claims for violations of New York law prohibiting deceptive business practices, violation of New York’s false advertising statute, and unjust enrichment.

“This will ultimately come down to what rules were in place for the different contests that DraftKings offered,” says Patrick M. Hanley, who is not involved in the litigation. “It seems like DraftKings went through a careful analysis, according to its own rules, for the different contests that it had. They paid out on some; they didn’t on others.”

While the plaintiff’s complaint makes out a case that DraftKings deviated from its own rules, Hanley cautions that those allegations should not be taken as “gospel” — “especially in light of the fact that DraftKings did pay off to winners in other contests.” Hanley, who served as the first chief of gaming enforcement for the Attorney General’s Office, currently handles gaming law matters as part of his practice at Butters Brazilian in Boston.

He says the case does demonstrate one of the benefits of legalization of gambling in the state.

“Ten years ago, this would have never happened,” Hanley says. “If someone had a complaint about wanting their money back because of a suspended game, do you think they’d sue their bookie in federal court?”

Salem class action attorney Matthew T. LaMothe says Turley’s suit has some “legs” given the alleged disparate treatment of the various DraftKings contests at issue.

DraftKings may be able to argue that the disparate treatment was justified by the fact that Turley had entered contests based on the results from only the Bills-Bengals game, whereas DraftKings’ other contests were based on accrued player stats from multiple games, LaMothe says.

“Maybe DraftKings felt it was unfair to allow the plaintiff to essentially ‘win’ this contest after only a brief portion of the game had been played,” says the LaMothe, McNiff, Relethford partner. “I can certainly see the plaintiff’s point. He was in the lead, and the rules say the points accrued. But there may be more fine print that the plaintiff didn’t include in his complaint that gives DraftKings various outs.”

 


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