Secrets Exposed? DraftKings Sues Former VIP Chief For Allegedly Revealing Secrets to Fanatics

DraftKings isn't taking the actions of its former VIP Chief lightly. This week, the U.S. legal sports betting behemoth filed a lawsuit against Michael Hermalyn, a former executive with the company, for allegedly stealing company secrets and revealing them to one of DraftKings' chief rivals, Fanatics Sportsbook. DraftKings and Fanatics are both found on our list of the best sports betting sites.

DraftKings filed a 49-page lawsuit in Massachusetts District Court this week claiming that Hermalyn “hatched a secret plan over the past year to steal and use confidential information, solicit customers and employees and join a key competitor, Fanatics, Inc., in brazen violation of his agreements with and duties to DraftKings.”

The suit aims to prevent Hermalyn from becoming an employee of Fanatics and to enforce a non-compete agreement that he signed as part of his employment with the company.

More on the suit

DraftKings alleges that Michael Hermalyn falsely claimed that a friend had passed away and needed a personal leave of absence in order to deal with the death.

The suit claims that Hermalyn used the time to travel to the Fanatics California office to meet with officials tied to the Fanatics sportsbook. At that time, DraftKings alleges that the company’s former VIP Chief “downloaded DraftKings’ confidential business plans for the Super Bowl while sitting in Fanatics’ offices.”

Hermalyn, while in California, was also able to change his residency status by acquiring a California state driver's license, a residence there, and a car that was registered in the Golden State.

According to DraftKings, all were part of an attempt to subvert his non-compete requirements that stipulated that he would be unable to work in the gaming industry for 12 months following his departure from the company. Readers who want to take advantage of DraftKings' offerings can use our DraftKings promo code.

The suit goes on to claim that "without prompt injunctive relief barring Hermalyn from violating his agreements with DraftKings, Hermalyn will be free to launch an unlawful and targeted attack against DraftKings’ business and divert its most valuable customers immediately prior to one of the most business critical weekends for DraftKings.”

According to the suit, the plan had been in the works for a year after Hermalyn allegedly met with Fanatics brass to discuss potential future employment opportunities.

Other allegations

Along with allegations of Hermalyn's attempt to violate terms of his past employment with DraftKings and spilling on DraftKings plans to maximize Super Bowl betting, the company revealed other complaints against its former VIP Chief.

Among them is the recruitment of other high-level DraftKings employees for Fanatics Sportsbook.

Another is an allegation of inappropriate conduct with female DraftKings employees, including untoward comments about appearance and even non-consensual touching.

Fanatics reaction

Although Fanatics is not technically part of the suit DraftKings filed, company brass weighed in on the lawsuit. According to a Fanatics company spokesperson, DraftKings' claims are nothing but "sour grapes."

A statement by that spokesperson read, “This is just sour grapes. DraftKings is understandably upset that one of its employees left for the greener pastures at Fanatics. The fact that they are trying to drum up ridiculous allegations on one of their well-respected executives in an attempt to ruin his reputation sheds some light on why employees may be choosing to leave that organization.”

So far, DraftKings has made no public comment about the impending suit.