Fantasy sports firm discovers the perils of bonusing

You can generally gauge the success and progress of a company by the amount of interest shown in it by the tax authorities, politicians and lawyers…and that seems to be the case with daily fantasy sports market leader FanDuel.

The company is currently the subject of a Miami class action by players that centres on its use of bonus incentives and the differences between what it promises in marketing promos, and how it actually calculates those bonuses.

It’s the sort of issue that in the UK is usually sorted out by the Advertising Standards Authority, but in this US case the Florida Deceptive and Unfair Trade Practices Act has been invoked.

Commenting on the case, Ifrah Law partner David Deitch said this week:

“FanDuel will undoubtedly raise defenses to these claims, and we do not mean to suggest one way or the other whether this class action has any merit.

“The takeaway from this lawsuit is that fantasy sports has gotten big enough that people are taking notice, and the companies that succeed will be targets for private plaintiffs and government agency enforcement (both state and federal).

“Entrants into this exciting market would be wise to proceed with care not only in the games that they offer but in the manner in which they offer them.”

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