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DraftKings Contest Prompts Lawsuit, N.J. Gaming Inquiry

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The controversial ending to the Sports Betting National Championship has prompted a class-action lawsuit against the contest operator DraftKings.

Contestant Christopher Leong filed the suit in New Jersey, making several complaints at how the $2.5 million contest was run.

The lawsuit is seeking a refund of the $10,000 entry fee for all participants plus damages for the way the defendant “accepted certain wagers and rejected others in a schizophrenic and wholly irrational manner.”

The contest concerned betting on two NFL playoff games: Patriots vs. Chargers and Saints vs. Eagles. The AFC game ended shortly before the NFC game, that leading to some bettors not having their wagers settled in time to bet on the second game.

“Defendant’s conduct has rendered the initial entry fee entirely or substantially worthless,” the lawsuit states.

ESPN reported in detail, using data on the DraftKings site, on the bet Leong placed in the AFC divisional round. The game ended at 7:44 p.m. but Leong’s $1,500 wager on Colts’ Marlon Mack to score less than 18.5 fantasy points against the Chiefs wasn’t paid until 9:22 p.m. Leong reportedly went to the Jersey City headquarters to get assistance in settling the bet at the help desk. About an hour after the bet settled, according to ESPN, DraftKings sent an email stating “bets on fantasy props take longer to settle than other wagers." Fantasy props on the Saints-Eagles game were complete less than 20 minutes after the game.

A DraftKings spokesman told ESPN that "absolutely no SBNC competitors had their bets graded/paid out on-site with the help of (DraftKings) members." The company says its back-end system that grades wagers worked correctly.

The suit asserts “the Defendant’s negligent, arbitrary, and capricious operation of the SNBC, while continually marketing to a national and large audience of participants, was, among other things, an unconscionable commercial practice that denied Plaintiff and the Class of the fundamental benefit underlying the opportunity to participate in the SBNC.”

The suit also alleges DraftKings:

  • Permitted “one SBNC contestant to wager after the announced close of wagering in the SBNC”
  • Credited “some SBNC participants with winning funds from a given sporting contest upon which bets had been placed, before crediting other SBNC participants with winnings funds from the same contests on which bets had been placed”

Before Leong filed his suit, another contestant, third-place finisher Rufus Peabody went on social media to say he had been denied the opportunity to bet on the final game of the contest.

Peabody bet on the Patriots in the first game of the day but did not receive his winnings in time to bet on Eagles-Saints. The slow settlement denied Peabody the chance of winning the $1 million grand prize.

He is not part of the class-action and he said he is still weighing his options. In finishing third, he won $250,000.

The New Jersey Division of Gaming Enforcement last week began an investigation into the tournament.

DraftKings spokesperson James Chisholm issued a statement saying: “We recognize that in the rules the scheduled end of betting coincided very closely to the finish of the Patriots-Chargers game. While we must follow our contest rules, we sincerely apologize for the experience several customers had where their bets were not graded in time to allow wagering on the Saints-Eagles game.

"We will learn from this experience and improve upon the rules and experience for future events.”