10:09am PT by Eriq Gardner
Fox, Time Warner, Comcast Dragged Into Legal Mess Surrounding Daily Fantasy Sports
In the past month, DraftKings and FanDuel have been contending with several states that see the daily fantasy sports operators as illegal gambling. The two companies have also faced dozens of lawsuits throughout the nation. Now, for the first time, the legal intrigue has spread to media companies.
Time Warner, NBC Sports Comcast Ventures and 21st Century Fox are among the defendants in an expansive class action lawsuit filed in Florida, first noted by sports law guru Michael McCann of Sports Illustrated.
The lawsuit targets others including professional sports leagues, payment processors and of course, DraftKings and FanDuel themselves
Perhaps of most concern for the media companies is the existence of a racketeering claim that describes DraftKings and FanDuel as the “ringleaders” of an illegal enterprise.
And how do the media companies — aka investor defendants — fit in?
According to the complaint, "By virtue of financing, promoting and endorsing Defendant FanDuel’s illegal internet gambling enterprise to grow and flourish and also provided credibility and legitimacy to the enterprise thereby attracting more unknowing players to participate a customers in the illegal gambling enterprise."
It's not known how much equity Time Warner and Comcast have in the daily fantasy sites, but 21st Century Fox owns enough — more than 10 percent — that its stake has been showing up in corporate disclosure documents in court in the past few weeks.
Next week, DraftKings and FanDuel appear in New York state court in an effort to fend off an injunction that would prohibit them from operating in the big state. Among the tidbits of information that NY Attorney General Eric Schneiderman has revealed as part of his case is exactly how much money these two sites have been pouring into advertising these past few months. For example, FanDuel spent $47 million just in the month of September for nearly 10,000 commercials. That's huge, although it probably will not be surprising to anybody who has watched football on Sundays.