DraftKings Lawsuit Drama: Insider Accusations Unravel

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00:00Welcome back to Newswire here on Sports Grid.

00:05We got the ultimate he-said-she-said story in sports betting this week.

00:09This lawsuit that is being filed against DraftKings with a response from one of the people involved

00:15in it.

00:16And let's bring in Sam McQuillan from Legal Sports Report.

00:19Sam, this is an extremely convoluted story.

00:22It's a convoluted lawsuit.

00:24On social media, there was a convoluted response trying to understand exactly what happened

00:31here.

00:32Is this a legit lawsuit?

00:33Is it not legit?

00:35The people involved, are they legit?

00:38Are they unsavory characters?

00:39I don't know what to make of this entire thing.

00:43I would love for you to tell me your opinion of it.

00:46But first, I think we probably should tell the story as to what this lawsuit is all about,

00:50and then we can take it from there.

00:53Yeah, Craig, it essentially involves three very strange parties.

00:57One is the John Doe who filed this lawsuit.

01:00One is a professional gambler named Kadun Kirilos, if I'm saying his last name wrong.

01:06I apologize.

01:07But he's commonly known as Spanky in the gambling world.

01:10And then DraftKings, a sports betting company, obviously.

01:13So it's these three parties have been named in this lawsuit.

01:16It accuses Spanky, who fired back this week, kind of telling his side of the story.

01:22It accuses him of extorting a man to pay him half a million dollars, who he allegedly

01:27found using information obtained from higher ups at DraftKings.

01:32The lawsuit accuses Spanky of orchestrating an altercation on a subway platform in Long

01:37Island City, Queens, which is just a stone's throw away from where I am right now across

01:41the river.

01:42The lawsuit, which identifies as John Doe, claims he was approached by a masked man during

01:49his commute into the city, who then threatened to kill him if he didn't pay $500,000 to Spanky.

01:56And then it goes on to say that Spanky allegedly got the information where he would know the

02:01whereabouts of this man and his commute from higher ups at DraftKings who have access to

02:06your personal information as a better Spanky came out on social media this week, saying

02:12that the person who filed the case, an attorney named Steven Jacobs, is actually the John

02:17Doe who is identified in the case, the person who alleges that this extortion happened.

02:23He's an attorney at Herbert Smith and Freehill in New York.

02:26He claims that the two actually met through a mutual friend who then gave Jacobs money

02:32to launch a gambling partnership, what's known as using someone as a beard to place money

02:37at DraftKings without getting limited.

02:39You know, a guy like Spanky who claims he is banned from many sports books, limited

02:44at many sports books because they won't take his money, his gambling is too good, his information

02:48is too good.

02:49They typically use these guys known as beards where these people aren't limited.

02:54They don't have a history with the sports book.

02:56They find them.

02:57They give them the money to place bets.

02:59They make money and then they split the money afterwards.

03:02So Spanky came out and said that he actually won a substantial amount through Jacobs, about

03:08$350,000 in profits, along with $14,000 in bonuses.

03:14And what he says happened, Spanky's side of the story, is that Jacobs tried to withdraw

03:18the money.

03:19He then was hit with a roadblock from DraftKings, which required him to sign some paperwork.

03:24He kind of got cold feet, Spanky says.

03:26Then Spanky tried to figure out what he could do to get this money out of this guy.

03:31He emailed the New York State Gaming Commission, he says, and then uncovered through a FOIA

03:36request that this guy actually withdrew his appeal to the New York State Gaming Commission

03:41to get his money back pretty much as soon as he sent it.

03:44So it's a lot of he said, she said, like you said, Spanky claims that he tested Jacobs

03:48by saying he could get info from DraftKings on the payout when he's saying, obviously,

03:53I can't get that because I'm banned from DraftKings.

03:55I can't get that info.

03:57So it's this weird embezzlement accusation scheme, whether or not this guy was actually

04:01accosted.

04:02We don't have any evidence whether or not Spanky went to other lengths to try to get

04:07his money back from this guy.

04:08It does seem like there is a mutual acknowledgement that there was some sort of bearding scheme

04:13or using someone to get money from DraftKings through a proxy for Spanky.

04:20So it should be noted that that's illegal in New York.

04:23So you have some people speculating why he would admit to that.

04:26Maybe it's to clear his name from this case.

04:28And it's weird just to see DraftKings involved.

04:30They put out a statement saying, hey, we really have no part in this.

04:33We don't know why we're being sued.

04:35We obviously wouldn't give information to a proxy better to go locate somebody.

04:40So more will come in this weird, weird case, and I'm sure more of it will be very weird

04:45indeed.

04:46Yeah.

04:47Yeah.

04:48A lot of strange commentary coming from this.

04:50Maybe the most strange is the fact that this Spanky says that he's limited or can't bet

04:57in these sports books.

04:58As far as I know, Sam, Las Vegas is a four or five hour flight away.

05:05Just do whatever you're going to do and then come back and you make yourself your fortune

05:08if indeed that is the case.

05:09I don't know.

05:10It's a very odd story, to say the least for me.

05:14Anyway, all right.

05:15Valley bet, not really off to the best start when sports betting got legal over the last

05:20couple of years.

05:22And now there is some discussion that Massachusetts was going to have Valley bet, but not going

05:27to have it at least for the time being.

05:29I know that there's been a lot of turbulence with this and the company as well.

05:34You know, naturally, you know, Valley inevitably is not going to be sponsoring these RSNs also

05:38in the future.

05:39So I wonder what the future of the name, by the way, Valley bet is.

05:43Yeah.

05:44Valley bet has waited over a year to launch in Massachusetts.

05:48So naturally it pushing back its launch date, again, isn't that surprising.

05:52It had actually planned to launch Valley bet today, but came out yesterday and told the

05:58Massachusetts gaming commission, frankly, it needs more time to get things straight.

06:02And it's now going to plan to launch sometime in July.

06:05The commission said that there's one outstanding issue to resolve, but it'd be surprising at

06:10this rate if they had much, if any success in the Bay state, considering it'll be about

06:1416 months since the other sports books have launched.

06:17People are getting plenty of action elsewhere in Massachusetts.

06:21You wonder what the incentive to join a book like Valley bet, which again, like you said,

06:25doesn't have the greatest reputation and has been marred by a myriad of problems.

06:30They're now on version 3.0 of their product after writing off about 3 billion or trying

06:35to write off about $3 billion in acquisitions over the last couple of years that resulted

06:40in less than 1% market share across the country.

06:44So when it launched the sports betting app last fall, it was offline in several States

06:49for a couple of months, obviously causing people to get off the app and lose more customers

06:55there.

06:56And they went over to third-party technology, which is the opposite of what most successful

07:00sports books do.

07:01We've seen them go on to their own technology and yeah, Valley bet is facing the, you know,

07:07the whole ordeal with losing Valley sports as well.

07:10And they are currently exploring a sale from one of their higher ups has offered to buy

07:15the company and suggested that they get out of sports betting altogether.

07:18We've seen smaller apps like win bet and better not survive in Massachusetts.

07:22So you have to think at this point, why are they even launching in Massachusetts if they

07:26can't even really do it on time?

07:28Yeah.

07:29No, it doesn't make sense.

07:30I mean, I guess that'll be the next story is they don't end up doing it.

07:33All right.

07:34Let's wrap it up with the latest going on in Canada.

07:36I know Pat was on the show yesterday talking about this new blueprint for the government.

07:41They're launching a regulated online gambling market in Alberta, Canada.

07:45Do you think that this happens?

07:47Yeah, I think it'll happen by the end of the year.

07:50They seem pretty optimistic from the reporting that Pat did.

07:53It's kind of the only steps forward are going to be negotiating with the 45 First Nations

07:58tribes and the land-based casino operators, but it could be a really big opportunity for

08:03the global gaming companies that are trying to get in the state.

08:06It's the fourth largest province in Canada and home to 3.3 million adults, where importantly,

08:13the legal age of gambling is only 18.

08:15So that opens up a bigger market to these companies, and it's going to use Ontario's

08:19model as a blueprint.

08:22And market analysts are suggesting that that could mean about $700 million in gaming revenue

08:27in the first year, which would be, I believe, the seventh largest market in North America

08:32for gaming operators.

08:33So it could be a huge boon for companies like DraftKings, FanDuel, that haven't got

08:38much traction in terms of legalizing iGaming and sports betting in the states.

08:42Now you go up north, you have this huge market, which most importantly, is going to have iGaming,

08:47which would be a huge, huge boon to their business.

08:49So we'll have to see what happens at the end of the year, but it's looking pretty good

08:53right now for the gaming companies who want to enter Canada.

08:55Yeah, could be an exciting time, FanDuel, DraftKings, and some of the others normally

08:59dominated by some of the other companies.

09:00Thanks again.

09:01Appreciate you coming on, Sam.

09:03Yep.

09:04Thanks a lot, Craig.

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