Draft Ops was a daily fantasy sports (“DFS”) website, like FanDuel and DraftKings, that used to be the “official fantasy partner” of a number of sports teams and media outlets, including the Minnesota Wild. Last spring, the Wild sued Draft Ops, alleging that the site owed the team $1.1 million pursuant to an agreement that allowed Draft Ops to use the Wild’s name and logo in advertising materials.
In a creative, if risky, attempt to avoid its contractual obligations to the Wild, Draft Ops argued that the agreement was void because, it further argued, DFS constituted illegal gambling in Minnesota. After years of litigation and lobbying by DFS operators to expand and protect the legality of their enterprise, it is fairly remarkable to see a DFS site argue that its business is illegal.
On the other hand, if any DFS site was going to turn state’s evidence, it makes sense it’d be one like Draft Ops, which appears to be out of business, filed for bankruptcy last week, and is more concerned about how it’s going to make good on the $1.1 million it allegedly owes the Wild than it is about the ongoing viability of the business model.
Draft Ops hit a roadblock in the Minnesota case last week, though, when the judge allowed the case to proceed, explaining that it was not clear that DFS was illegal under Minnesota law, and that, even if DFS clearly was illegal in the state, there still could be grounds on which the court could enforce the contract, which, the judge noted, was a sponsorship and advertising contract, not a gambling contract.
If this strategy sounds familiar, that’s because it essentially is the same one people who lost money playing DFS tried in lawsuits they filed against the DFS sites themselves last year.
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