Underdog Fends Off Illinois Illegal Sports Betting Allegation For Now

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A lawsuit accusing Underdog Fantasy of unlicensed sports betting will be dismissed unless the plaintiff can make a better case by September 29, an Illinois circuit court ruled.

In an August 30 hearing before the 24th Circuit in Washington County, Judge Daniel J. Emge, called the Illinois sports betting definition too broad to utilize against Underdog on its own. He gave plaintiff Mark Lavery, who has filed many similar lawsuits, 30 days to come up with specific proof that Underdog offers unlicensed gambling, citing a precedent set by the Illinois Supreme Court.

Illinois defines gambling as when a person knowingly plays a game of chance or skill for money, with a few exceptions.

“I find it hard to believe that one could file an action alleging gambling based on that alone,” Emge said, siding with Underdog attorney William Gantz. “I agree with Mr. Gantz that the Plaintiff in the case has to plead and prove the exceptions. That is the only way it makes sense to me given that broad initial definition of gambling, not considering the exceptions.”

Another lawsuit from Lavery, Langone

This is one of several pending lawsuits Lavery has filed against Underdog, DraftKings, and their fantasy users, attempting to recoup alleged illegal gambling winnings from the players and the house. In this case, Lavery is suing Randy Ratajczyk Jr., an Underdog user the company is representing.

“We believe we will be able to plead facts to show that Underdog does not offer bonafide contests based on skill, speed and endurance for a number of reasons. We’re confident the court is going to side with us,” Langone told LSR. “It’s a very nuanced area of the law, but these distinctions matter. We don’t think because sports betting involves sports you can simply call it fantasy sports.”

Back in the day, a FanDuel challenge

Lavery, who identifies himself as an advocate against illegal gambling, is represented by Christopher Langone. The pair lost a similar suit to FanDuel in 2013, where they argued that daily fantasy sports involves a greater degree of chance than skill.

Most of their lawsuits fall under the Illinois Loss Recovery Act, which Langone argues permits anyone to recoup losses from illegal gambling if the loser does not attempt to do so within six months of their loss. A similar complaint against PrizePicks was recently settled outside of court.

“He has a long, long record of filing cases like this, with an equally long record of those cases being quickly thrown out,” an Underdog spokesperson said in a statement to LSR. “We’re not concerned a bit. Illinois has clear laws governing paid fantasy sports, and we follow them to the letter.”

Burden on plaintiff, not Underdog

Lavery alleges Underdog’s pick’em contests, where users predict a combination of stat lines for different athletes, are unlicensed gambling because they rely predominantly on chance over skill. But that is not enough to support the entire lawsuit, argues Gantz, who cited an Illinois Supreme Court decision in a similar case involving FanDuel.

“You can’t just file a lawsuit and say, well, it is a game of skill or it is a game of chance and it was played for money, therefore, it is gambling,” Gantz said. “The Court expressly observed that it is the Plaintiff’s burden to sustain a cause of action under the LRA to establish that the subject losses occurred while gambling.”

Emge agreed that the burden is on the plaintiff to prove the defendant is offering unlicensed sports betting, not the other way around.

Legality of pick’em fantasy called into question

The legality of pick’em games has been questioned recently across several states with legal sports betting. However, those decisions hold no legal authority in Illinois.

During the hearing, Langone said their legality is further delegitimized by the use of predictive software, which he called cheating. He also called into question pro athletes who have a stake in Underdog, and said bettors like Ratajczyk are incentivized to play pick’em “because they get better odds because they don’t have to pay taxes.”

Lavery’s behavior called into question

Underdog was granted a protective order against Lavery in August after threats and harassment made through email and social media that involved sexually explicit language.

It is tied to a separate case on behalf of a different user, though Emge also appeared to take issue with Lavery’s behavior.

“Now I made you come down here in person because of Mr. Lavery’s behavior on Zoom. If he was not going to appear, I would have gladly done this via Zoom, because I know you both came a long way for this.

“I am not opposed to future appearances on Zoom with the caveat that if it gets out of hand, this is how it will be.”

Lavery did not appear in-person at the hearing. Under the order, he is barred from direct or indirect contact with Underdog until the related case is resolved.