A group of California lawyers suing Fliff for running an allegedly illegal sports betting outfit responded to a claim that customer complaints about the self-proclaimed “social sportsbook” are ineligible in the courtroom under its terms and conditions.
Fliff’s contractual terms are not enforceable under state law, attorneys representing Bishoy Nessim told the US Central District of California Court in Riverside last week. Nessim, a California resident, is seeking a class action that would award millions to California Fliff players who lost money on the app, which markets itself as free-to-play in states that outlaw sports betting.
San Diego-based Dennis Stewart of Gustafson Gluek PLLC is the chief attorney representing Nessim.
Class action at stake in court decision
Fliff wants to hash things out through an impartial third party rather than in court, and recently filed a motion to compel arbitration.
The court will hold a hearing on the motion on Sept. 29.
Should the court grant Fliff’s motion for arbitration, it would prevent “hundreds if not thousands” from joining in on a class action, according to Nessim’s lawyers.
Californians cannot sign away rights, lawyers say
Fliff claims that when customers agree to the terms and conditions to use the website, they agree to handle any legal disputes through third-party arbitration.
But Nessim’s lawyers say that violates California’s Unfair Competition Law, which protects customers from waiving their right to seek public injunctive relief, under the California Supreme Court’s interpretation in a 2017 lawsuit against Citibank.
“In sum, because Plaintiff alleges a cause of action under the UCL, and seeks highly important public injunctive relief vindicating the state’s fundamental policy against gambling, Fliff’s arbitration terms violate the McGill Rule,” Nessim’s lawyers said in their response to Fliff’s motion to compel arbitration.
They added that those terms and conditions would likely only be enforceable in Pennsylvania, where Fliff operates its headquarters.
Fliff decision could impact others
A decision against Fliff could have potential reverberations for other services operating in California for years to come.
It is one of several lawsuits filed this summer amid an apex of scrutiny over companies operating through DFS law that offer products that look like sports betting, and the gray area between gambling and gambling-adjacent products.
The Golden State represents one of the biggest markets for daily fantasy sports pick’em operators like PrizePicks and Underdog Fantasy, each of which has been notified of potentially violating sports betting laws in other parts of the country. While California has not taken a stance against sports betting adjacent products, it explicitly rejected legalized sports betting at the ballot box in 2022.