The parent company of DFS operator Draft Ops has attempted to duck out of paying their sponsored U.S. hockey team Minnesota Wild over $1m by citing the illegality of DFS.
The bizarre thing about this move is that the State of Minnesota, unlike some other U.S. states, has not declared Daily Fantasy Sports to be illegal.
Draft Ops struck up a sponsorship deal with NHL team Minnesota Wild back in September 2015. The hockey team have now filed a legal complaint that DraftOps owe them $1.1 million dollars. This stems from missed payments between November 2015 – June 2016.
The Draft Ops argument…
In their motion to dismiss the case, Draft Ops acknowledged the sponsorship. However, they argued that the court should dismiss owed payments because:
“Sponsor shall have the right to terminate this Agreement upon written notice in the event either the NHL and/or State of Minnesota rule that Sponsor’s primary business activities are illegal or prevented by Rule or Law.”
They then argued that Minnesota’s failure to pass regulation laws for DFS this May amounted to fulfilling these termination requirements. However, other DFS sites still operate in the state.
Bad for the industry?
Draft Ops is technically declaring itself to be illegal in Minnesota. This is despite the efforts of DFS operators like DraftKings and FanDuel to prove they provide legal games of skill. This attempt to save money on Draft Ops’ part may cause naysayers later down the line to oppose DFS providers.
As DFS legality expert Marc Edelman put it to Legal Sports Report:
“The optics of this are terrible for Draft Ops as the law has not changed in Minnesota has not changed in recent months […] If their activities are illegal in Minnesota today, they have been illegal in Minnesota for years.”
It’s difficult to see a DFS website declaring itself illegal as a positive move for DFS in the United States. Of course online gambling is legal in the UK, so DFS legality issues don’t directly affect us. On the other hand, the U.S. is such a big base for DFS. Anything that shakes the foundations over there may have an impact on the popularity and viability of DFS worldwide.