FanDuel sued by NFL executive convicted of gambling habit

FanDuel Inc. was sued by a former Jacksonville Jaguars executive who admitted stealing more than $22 million from the team but says the website knew he was an addicted gambler and offered him more than $1 million in credits and “generous” gifts to ensure he continued to gamble.

The complaint by Amit Patel, who pleaded guilty in December and was sentenced to 78 months behind bars in March, alleges that FanDuel ignored its own responsible gaming protocols and “actively and intentionally targeted and preyed” with incentives to feed their addiction. The suit in federal court in New York seeks more than $250 million in damages.

The lawsuit comes as signs of gambling addiction grow following a 2018 Supreme Court ruling that struck down a law that banned sports betting in most states. Since then, the big sportsbooks have stepped in, attracting more than a hundred billion dollars in bets last year alone, up more than a quarter from the previous year, and bettors can now risk money on sports from baseball Korean to Chilean football.

In his suit, Patel says he wagered more than $20 million on FanDuel between late 2019 and early 2023 and was granted VIP status in 2021. He was then assigned a host who constantly communicated with him and enticed him to play more with “relentless finance”. incentives, generous trips, event tickets and other gifts” – including more than $1 million in FanDuel credits and all-expenses-paid trips to a Formula 1 race in Miami, the college football national championship game and the Masters golf tournament .

“To be clear, this lawsuit does not allege liability on the basis that the defendants passively allowed an addicted gambler to use its platform,” Patel said in the complaint. He says that instead, FanDuel “actively and intentionally targeted and bombarded” him with “incentives, credits and gifts to create, feed, accelerate and/or exacerbate his addiction, with the only possible result that he ultimately would hit rock bottom.”

FanDuel spokesman Chris Jones said the company does not comment on pending litigation.

“Know Your Customer”

Patel says the site consistently ignored its own standards to avoid acknowledging that Patel’s deposits did not come from a legitimate source and circumvented its own “know your customer” and anti-money laundering requirements to ensure that he continued to deposit money and “gamble in massive amounts and frequencies.”

Casinos were generally exempt from liability for problem gamblers who lost money under their roofs. A New Jersey judge earlier this year dismissed a lawsuit against MGM Resorts International brought by a compulsive gambler — former Crazy Eddie CFO Sam Antar — who claimed the company constantly enticed him to gamble even though he knew he had an addiction .

Matthew R. Litt, an attorney representing both Patel and Antar, concedes that under current law, a casino “is not responsible for rescuing a player from himself.” But Litt says the precedent is “prehistoric” and applies to brick-and-mortar casinos rather than online betting.

“That made sense in the brick-and-mortar world,” Litt said. “But now we’re in a completely different world and the law needs to change.”

The involvement of Patel’s VIP host, who offered him millions of dollars worth of bets and trips to high-profile sporting events — which he and his girlfriend attended with Patel — “is something we’ve never seen before,” Litt . said.

“False Friendship”

“The VIP host business is such a dirty relationship,” he said. “It’s this false friendship. You see this over and over again, this is how VIP hosts work. They’re almost in this fiduciary position where they become the addict’s confidant.”

The Jaguars sued Patel, who served as manager of its financial planning and analysis department, in Florida state court in July for theft, alleging he stole the money through an “elaborate scheme” that involves virtual credit cards issued to team personnel.

The team, which is seeking $66 million from Patel, said it created and approved several cards in its own name or that of other employees, either for expenses that appeared legitimate — such as catering, airfare, tickets or accommodation costs – or they are completely false. .

Studies have shown that online gambling contributes to consumer stress, leading Americans to pull money out of their brokerage accounts to fund their bets, and contributes to an increase in auto loan delinquencies, bankruptcies and debt collections.

The case is Patel v. FanDuel Inc., 24-cv-7402, U.S. District Court, Southern District of New York (Manhattan).

Top photo: A sign hangs on the wall in the reception area at the offices of FanDuel Inc in Edinburgh, Britain, Tuesday, February 7, 2017. Photographer: Chris Ratcliffe/Bloomberg.

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