Case 1:16-Md-02677-GAO Document 269 Filed 09/02/16 Page 1 of 291
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Case 1:16-md-02677-GAO Document 269 Filed 09/02/16 Page 1 of 291 UNITED STATES DISTRICT COURT DISTRICT OF MASSACHUSETTS _________________________________________ ) In re: DAILY FANTASY SPORTS LITIGATION ) MDL No. 16-02677-GAO ) This Document Relates to: ) JURY TRIAL DEMANDED ) All Cases ) ) ) FIRST AMENDED MASTER CLASS ACTION COMPLAINT AND JURY DEMAND 1 Case 1:16-md-02677-GAO Document 269 Filed 09/02/16 Page 2 of 291 INTRODUCTION .......................................................................................................................... 1 JURISDICTION AND VENUE ................................................................................................... 10 PARTIES ...................................................................................................................................... 11 A. Plaintiffs ................................................................................................................................ 11 The Alabama Plaintiff ........................................................................................................... 11 The Arizona Plaintiff ............................................................................................................. 12 The Arkansas Plaintiff ........................................................................................................... 13 The California Plaintiffs ........................................................................................................ 14 The Colorado Plaintiff ........................................................................................................... 18 The Connecticut Plaintiffs ..................................................................................................... 19 The District of Columbia Plaintiff ......................................................................................... 21 The Florida Plaintiffs ............................................................................................................. 22 The Georgia Plaintiff ............................................................................................................. 25 The Illinois Plaintiffs ............................................................................................................. 26 The Kentucky Plaintiffs ......................................................................................................... 28 The Massachusetts Plaintiffs ................................................................................................. 30 The Michigan Plaintiff .......................................................................................................... 33 The Minnesota Plaintiff ......................................................................................................... 34 The Missouri Plaintiff............................................................................................................ 35 The New Hampshire Plaintiff ................................................................................................ 36 The New Jersey Plaintiffs ...................................................................................................... 37 The New Mexico Plaintiff ..................................................................................................... 39 The New York Plaintiffs ....................................................................................................... 40 The North Carolina Plaintiffs ................................................................................................ 44 The Ohio Plaintiff .................................................................................................................. 45 i Case 1:16-md-02677-GAO Document 269 Filed 09/02/16 Page 3 of 291 The Oregon Plaintiff .............................................................................................................. 46 The Pennsylvania Plaintiffs ................................................................................................... 47 The South Carolina Plaintiff .................................................................................................. 50 The Tennessee Plaintiff ......................................................................................................... 51 The Texas Plaintiffs ............................................................................................................... 51 The Utah Plaintiff .................................................................................................................. 55 The Virginia Plaintiff ............................................................................................................ 56 The West Virginia Plaintiff ................................................................................................... 57 The Wisconsin Plaintiff ......................................................................................................... 58 The Family Member Plaintiffs .............................................................................................. 59 B. DFS Defendants .................................................................................................................... 62 C. Payment Processor Defendants ............................................................................................. 63 D. Non-Defendant Banks ........................................................................................................... 63 E. Non-Defendant Facilitators ................................................................................................... 64 F. Non-Defendant Enterprise Investors ..................................................................................... 65 COMMON FACTUAL ALLEGATIONS .................................................................................... 75 I. Daily Fantasy Sports ......................................................................................................... 75 II. Representations Made By DraftKings And FanDuel ........................................................ 76 A. DraftKings and FanDuel Each Engaged In Omnipresent National Advertising Campaigns Reaching Millions of Consumers With The Same Messages.................. 76 B. DraftKings and FanDuel Advertised Their Products As 100% Legal ........................ 84 C. DraftKings and FanDuel Advertised Their Products As Easy, Simple Games of Skill That Anyone Could Win............................................................................................. 88 D. DraftKings and FanDuel Advertised Bonus Money When Plaintiffs And Consumers Made Deposits .......................................................................................................... 103 1. DraftKings...................................................................................................... 104 ii Case 1:16-md-02677-GAO Document 269 Filed 09/02/16 Page 4 of 291 2. FanDuel .......................................................................................................... 116 E. The Reason DraftKings and FanDuel Made Material Misrepresentations and Omissions Is That They Had To Grow Their User Bases And Could Not Do So With The Truth About Their Products .............................................................................. 127 III. DraftKings’ and FanDuel’s Representations Were False; DraftKings and FanDuel Knew These Representations Were False, And DraftKings and FanDuel Omitted Material Information From Plaintiffs and Consumers .................................................................. 134 A. Multiple States Have Determined DraftKings and FanDuel Are Not 100% Legal.. 135 B. DraftKings and FanDuel Helped Create An Unfair Playing Field, A Rigged Game, One That Was Not Simple and Easy To Win, And One In Which Only Few Players Won .......................................................................................................................... 138 C. DraftKings and FanDuel Acted In Concert To Allow Their Employees To Use Inside Information To Gain Unfair Advantage Over Plaintiffs and Consumers ................. 157 D. DraftKings’ and FanDuel’s Bonus Offer Was A Scam ............................................ 168 E. The Arbitration Provisions in DraftKings’ and FanDuel’s “Terms of Use” Are Invalid, Unenforceable and Unconscionable ............................................................ 170 1. DraftKings’ Unenforceable Arbitration Provision......................................... 170 2. FanDuel’s Unenforceable Arbitration Provision ........................................... 178 IV. Family Members of DFS Players Were Harmed By Financial Losses ........................... 182 CLASS ACTION ALLEGATIONS ........................................................................................... 184 CAUSES OF ACTION ............................................................................................................... 200 COUNT I: Violation Of The New York Deceptive Acts And Practices Law ................................... 200 COUNT II: Violation Of The New York False Advertising Law ........................................................ 202 COUNT III: Violation Of The New York General Obligations Law .................................................... 204 iii Case 1:16-md-02677-GAO Document 269 Filed 09/02/16 Page 5 of 291 COUNT IV: Violations Of The Massachusetts Consumer Protection Act ............................................ 205 COUNT