DraftKings and FanDuel, the heavily promoted daily fantasy football sites under increasing scrutiny nationwide, are now also facing a South Florida class-action lawsuit that accuses the companies of rigging their games to fleece most customers.
The sites, whose ads have become ubiquitous on sports TV and radio, allow a tiny number of high-rolling customers — dubbed “apex” or “shark” users — to use sophisticated software to crunch data that can help them win lucrative pots, according to a newly filed federal lawsuit.
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The rest of the customers, average football fans suckered in by advertising promising big payouts, stand virtually no chance of winning any significant money in what amounts to an illegal gambling operation, Coral Gables lawyer Ervin Gonzalez said at a press conference on Tuesday.
“They have devised a way to make billions while ripping off customers,” Gonzalez said.
Every day, millions of users — who must open accounts and pay registration fees — can “draft” real-life players for a virtual team, and can win if their roster in real life racks up touchdowns, baskets or home runs, depending on the sport.
A spokeswoman for FanDuel declined to comment on the South Florida lawsuit. A spokesman for DraftKings, whose co-founder is a graduate of Miami Killian High, also declined to comment on the pending litigation.
The suit is just the latest legal action filed against the two daily fantasy sports sites that business analysts value at about $1 billion a piece. Together, they have spent more than $100 million on advertising since August, promising lucrative payouts.
But the websites have also drawn a surge of criticism, a slew of consumer lawsuits and government scrutiny. Just last week, Nevada’s gaming commission declared the sites were indeed acting as illegal gambling sites; they contend the games are of skill, not chance.
The bad news has come in a wave, sparked by revelations that a DraftKings employee used inside data to assemble a winning fantasy team with rival FanDuel. The New York Attorney General’s Office has launched an inquiry.
The FBI in Tampa has also opened a review of the industry’s practices.
The claim was filed on behalf of Antonio Gomez, of Miami, who “placed wagers” on FanDuel; and Alejandro Garcia, of Miami, who played on DraftKings. The suit names the companies and several high-profile so-called “shark” bettors, daily fantasy sports players who have earned fame for their success on the websites.
The complain names Drew Dinkmeyer, of Fort Lauderdale, a former investment analyst who famously won $1 million in one pool and has been profiled in the Wall Street Journal and other media outlets. He did not return a call from the Miami Herald on Tuesday.
According to the lawsuit, the sites secretly allow these elite players to use “elaborate computer programs and algorithms” with names such as a “robots,” “spiders” and “scrapers” to gain an advantage over average customers.
The companies take a cut of the entries, while elite players collect winnings after pumping in large amounts of money to round out the pots, the suit said. Just 1.5 percent of users take in 90 percent of the winnings on the sites, said Miami attorney John Priovolos, one of the lawyers in the case.
“These people are akin to the card counters in the casinos,” Priovolos said.