We have previously focused on several legal aspects of online fantasy sports, ranging from fantasy sports insurance to the legality of daily fantasy sports tournaments. We have also written extensively on the efforts of several states to legalize fantasy sports within their borders and how to avoid regulatory penalties associated with fantasy sports. A new dispute has been brewing in the industry lately, but this time it has nothing to do with federal or state regulators… the legal maneuvering is between two of the largest providers of fantasy sports gaming: FanDuel and DraftKings.
FanDuel’s Fantasy Sports False Advertising Claims
This controversy between FanDuel and DraftKings emanates from a series of advertisements propounded by DraftKings. The advertisements in question allegedly claim that DraftKings offers the largest weekly cash pools for daily fantasy sports on the Internet, among other similar declarations.
Earlier this month, FanDuel sent DraftKings a cease and desist letter, demanding that DraftKings remove any false and misleading advertisements that claim that DraftKings is the fantasy sports industry leader. According to FanDuel, there is no debate that FanDuel is the largest provider of fantasy sports gaming and that DraftKings advertisements constitute false advertising in violation of the FTC Act and other applicable state and federal laws.
In response to the cease and desist letter, DraftKings publicly declared that FanDuel’s accusations are completely without merit. DraftKings has stated that it believes that it is the “#1 destination for daily fantasy sports” based upon the wide range of services and games offered by DraftKings. Such subjective statements that may be backed up with substantiated facts cannot be the basis for a false advertising lawsuit, according to DraftKings. Going further, DraftKings’ Vice President states that “[w]e encourage healthy competition, and look forward to matching wits on the things that matter… [however] this type of frivolity only serves to undermine consumer confidence and weaken the entire industry.”
Third-party fantasy sports websites and player forums have tended to agree with DraftKings’ views, so it will be interesting to see how FanDuel reacts to the public backlash.