CATrends: ‘Daily Fantasy Sports’

If you’re one of the millions of people who play fantasy football, at this point in the NFL season you could either be planning for the playoffs or already selecting your keepers for next year. But regardless of whether you win your league or finish dead last, there may only be bragging rights on the line.

“Daily fantasy sports” is different. And according to a recent trend in class-action lawsuits, the operators of many daily fantasy sports or DFS platforms are offering illegal bets under the guise of fantasy sports and in some cases stacking the deck against bettors.

Whereas in traditional fantasy sports competitions, participants assemble teams of athletes to compete against friends and family over the course of an entire season, DFS bettors pick players to hit certain performance benchmarks in a single game in wagers known as player props.

But the lawsuits allege that these DFS contests constitute an illegal form of gambling, even including in states where sports betting is legal but the operators allegedly aren’t licensed in the state to engage in sports betting activity.

Most of the lawsuits, however, were filed in California, where sports betting is illegal. This includes a complaint filed last month against Sleeper, which alleges the platform’s “fantasy” games are actually “illegal online sports bets.”

Consumers are not competing against one another, but in reality, they are betting against the house—Sleeper—who sets sophisticated betting lines designed to ensure its own profit. Nor is it “fantasy,” because consumers are not betting on imaginary teams of athletes, but simply betting on the performance of real-world athletes.

Another lawsuit filed against Boom Fantasy in October similarly alleges:

Reasonable consumers are misled into believing they are participating in lawful fantasy sports contests when in fact they are placing unlawful sports bets against the house.

The complaint claims that Boom Fantasy is not registered to engage in sports betting in Illinois, and notes the state’s recent crackdown on unlicensed betting operators.

Other platforms named in these lawsuits include Underdog Fantasy, DraftKings, PrizePicks, FanDuel, Thrillzz Sweepstakes Sportsbook and Kalshi.

The majority of the cases are pending. Two were voluntarily dismissed and one was stayed pending mediation.

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