Case Dismissed: Fantasy sports operators cannot be sued in Illinois under the Loss Recovery Act

Published On October 9, 2013 | By Marc Zwillinger | Internet Gambling & Fantasy Sports, Litigation

In an important decision for fantasy sports sites, the United States District Court for the Northern District of Illinois ruled today (October 9, 2013) that a suit brought under Illinois’ Loss Recovery Act against FanDuel —  a ZwillGen client and leading daily fantasy sports site — and one of its players (Patrick Kaiser) should be dismissed.   The ruling makes clear that entities who organize and operate fantasy games for a fee are neither “losers” nor “winners” under the Loss Recovery Act, and thus cannot be sued under Illinois law by someone who lost money playing in a fantasy sports contest.   Equally important to these types of suits, the court ruled that the unusual provision of Illinois law, which allows anyone to sue on behalf of a gambling loser who has not brought suit within 6 months of losing money, cannot be invoked unless the plaintiff can identify: (1) a specific individual who lost more than $50, (2) a winner who won the money; (3) how much was lost, and (4) the specific date on which that event took place.   Thus, the statute cannot be invoked by random citizens seeking to generally disgorge money from “winners” on behalf of unnamed and unidentified losers.

The opinion is attached here.  Fanduel Opinion 10-9-2013.  The court did not reach the question of whether fantasy sports contests over the Internet are per se legal under Illinois law because, due to the stage of the litigation at which the court dismissed the action, it was not presented by the Defendant’s motion to dismiss.

FanDuel and Patrick Kaiser were represented by Bart Huff, Marc Zwillinger & Jake Sommer.

About The Author

Marc is the founder and managing member of ZwillGen PLLC and has been regularly providing advice and counsel on issues related to the increasingly complex laws governing Internet practices, including issues related to Electronic Communications Privacy Act (“ECPA”), the Wiretap and Communication Acts, privacy, CAN-SPAM, FISA, spyware, adware, Internet gambling and adult-oriented content. He also helps Internet Service Providers and other clients comply with their compliance obligations pertaining to the discovery and disclosure of customer and subscriber information.

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