FanDuel Sued by Convicted NFL Executive Over Gambling Habit

FanDuel Inc. was sued by a former Jacksonville Jaguars executive who admitted to 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 “lavish” gifts to make sure he continued to place bets.

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” on him with incentives to feed his addiction. The suit in federal court in New York is seeking more than $250 million in damages.

The suit comes as signs of betting addiction are increasing following a 2018 Supreme Court ruling that struck down a law banning sports betting in most states. Since then, major sportsbooks have stepped in, drawing in more than hundred billion dollars in bets just last year, rising by more than a quarter from the year before, and bettors can now risk money on sports ranging from Korean baseball to Chilean soccer.

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

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

FanDuel spokesperson Chris Jones said the company doesn’t comment on pending litigation.

‘Know Your Customer’

Patel says the site consistently ignored its own standards to avoid recognizing that Patel’s deposits weren’t from a legitimate source and circumvented its own “know-your-customer” and anti-money laundering requirements to make sure he continued depositing money and “gambling in massive amounts and frequencies.”

Casinos have generally been spared from liability over problem gamblers who have lost money under their roofs. A judge in New Jersey earlier this year threw out a lawsuit against MGM Resorts International filed by a compulsive gambler — former Crazy Eddie Chief Financial Officer Sam Antar — who alleged the company constantly lured him to bet despite knowing that he had an addiction.

Matthew R. Litt, an attorney who represents both Patel and Antar, admits that under the current law a casino “is not responsible for saving a gambler from himself.” But Litt says the precedent is “prehistoric” and addresses casinos with physical locations rather than online betting.

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

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

‘Faux Friendship’

“The VIP host business is such a dirty relationship,” he said. “It’s this faux friendship. You see this over and over, this is how the VIP hosts operate. They’re almost in this fiduciary position where they become confidants of the addicted gambler.”

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

The team, which is seeking $66 million from Patel, said he created and approved multiple cards in his own name or that of other employees, either for expenses that appeared legitimate – such as catering, airfare, ticketing or lodging costs – or were entirely fake.

Studies have shown that online betting is contributing to consumer stress, leading Americans are taking money out of brokerage accounts to fund their bets, and contributing to a rise in auto loan delinquencies, bankruptcies and debt collection.

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

Top photo: A sign hangs on the wall in the reception area at FanDuel Inc’s offices in Edinburgh, U.K., on Tuesday, Feb. 7, 2017. Photographer: Chris Ratcliffe/Bloomberg.

Copyright 2024 Bloomberg.