DraftKings paid $102,000 to settle a class-action lawsuit over its handling of the 2019 Sports Betting National Championship.
New York bettor Christopher Leong filed the suit in January 2019, shortly after the event itself, on behalf of nearly 200 class members.
In the suit, Leong claimed “negligent” handling of the event rendered his $10,000 entry fee “worthless.”
Specifically, the suit centered on claims that DraftKings paid some bets in the contest out early, but not others. That allegedly allowed some participants extra bets and an unfair advantage.
The suit also claimed DraftKings Sportsbook‘s betting platform was unfair throughout the contest, as it “accepted certain wagers and rejected others in a schizophrenic and wholly irrational manner.”
What will the plaintiffs receive?
Leong will receive $7,000 from the settlement, while his lawyers will receive up to $66,000. All other entrants in the contest will receive $150 in credit to DraftKings games.
The settlement could be seen as a win for DraftKings, which previously warned its liabilities from the case could run to $5.8 million, according to Law360.
The company also denied any wrongdoing in its operation of the sports betting event, saying it settled to avoid the expense and distraction of litigation.
The denial of wrongdoing is key, as DraftKings could yet face further legal action.
Sports Betting National Championship saga goes on
Third-place finisher Rufus Peabody was one of those bettors unable to place his final planned bets, potentially costing him a chance at the win.
Peabody was not part of the class-action suit, and said he turned down an offer “similar” to what Leong received.
And because their offer was a joke. It was a slap in the face.
— Rufus (@RufusPeabody) April 21, 2020
The New Jersey Division of Gaming Enforcement carried out its own investigation into the event and concluded DraftKings did not breach any of its regulatory duties.
What next for DraftKings?
DraftKings is due to become a public company this week, as Diamond Eagle shareholders vote Thursday on whether to approve the three-way deal between itself, DK and SBTech.
The combined company will likely be spending some money on lawyers regardless, with SBTech also potentially facing lawsuits around its recent extended outage.
DraftKings declined to comment for this story.
