PrizePicks is being sued for allegedly stealing the technology it uses to offer player prop-style, over-under fantasy sports games.
Vetnos LLC, a business-to-business fantasy sports provider, filed a patent infringement and trade secret misappropriation complaint Tuesday with the Northern District of Georgia after years of allegedly trying to do business together. It claims its patented fixed-odds fantasy technology is the same software that runs PrizePicks’ players vs house games.
Vetnos wants interest on lost profits, royalties, and additional monetary damages for allegedly jeopardized trade secrets from a former employee.
PrizePicks intends to fight back
PrizePicks fired back at the suit in a statement:
“After years of trying unsuccessfully to get us to buy its technology and intellectual property, Vetnos has now apparently resorted to a frivolous lawsuit to change our minds. That is not a good business or legal strategy. We intend to aggressively defend against this lawsuit and point out its many errors and outright falsehoods,” said Jason Barclay, Chief Legal Officer and Head of Public Policy at PrizePicks.
Vetnos filed for three patents in 2014 and 2015 that secured rights for technology to manage financial and performance risk within the fixed-odds format, much like a sportsbook does with the different vig and totals on player prop offerings. The complaint claims no fixed-odds DFS player games existed before Vetnos developed its technology.
It licenses those products to Native American tribes with Class II gaming licenses in California and Oklahoma, according to its website. Both of those states have yet to legalize sports betting and are key markets for DFS companies like PrizePicks.
Complaint years in the making
Vetnos claims it repeatedly warned PrizePicks CEO Adam Wexler of the potential copyright infringement involved with its product, including during an alleged meeting between Orlow and Wexler at the SBC Summit in New Jersey in 2021.
“We apprised PrizePicks of our concerns for several years in an effort to resolve this matter amicably, but unfortunately PrizePicks refused to respect our IP rights, so we were left with no option but to seek help from the court system,” Vetnos co-founder Dan Orlow said.
In the complaint, Vetnos alleges that Wexler said, “We liked your game so much, we decided to copy it.”
PrizePicks employee implicated in suit
Vetnos claims a former employee (Steven Kerstein) from its predecessor, Game Sports Network, aided in “copying” Vetnos technology:
“By copying the Vetnos Technology, PrizePicks was able to launch a fixed-odds daily fantasy sports game and learn to effectively manage the risk associated with offering such a game without engaging in the significant trial, error, and loss that Vetnos’ predecessor engaged in to develop the Vetnos Technology,” the complaint says.
After working in risk management for GSN’s technology, Kerstein moved into a consulting role with PrizePicks in 2018, according to the complaint. Vetnos claims he sent confidential information concerning the technology to his personal email before leaving GSN, breaching a non-disclosure agreement.
Kerstein now heads company relations and market intelligence at PrizePicks. The operator has until July 11 to respond to the complaint.