The Need for Adopting Mass Arbitration Waivers in the Online Sports Betting Industry

Authors

Samuel Ditchek, Benjamin N. Cardozo School of Law

Abstract

FanDuel and DraftKings, two ascending corporate powerhouses, have been the driving force in online sports betting's surge in popularity. Akin to other online services, both of these providers have featured/currently feature binding arbitration clauses that compel users to settle disputes through arbitration. Though their Terms of Use resemble typical consumer contracts, FanDuel and DraftKings have made a costly error in failing to account for mass copycat arbitration actions. These types of actions are avenues for large groups of consumers to individually file arbitration claims in order to force a settlement. Without the intention of actually pursuing their arbitration claims, consumers are able to overcome what are otherwise adhesive contracts because companies like FanDuel and DraftKings are unwilling to pay exorbitant amounts of money in arbitration filing fees.

This Note will first broadly examine the online sports gambling industry and in Part II, examine how FanDuel and DraftKings conduct their operations. This Note will proceed to analyze certain sections of both companies' user agreements in Part III. In that section, this Note will take an in-depth look at previous major lawsuits and at pending litigation involving the companies' arbitration provisions. Finally, in Parts IV and V, this Note will explore the application of mass arbitration actions in the online sports betting industry, and the need for FanDuel and DraftKings to amend their terms to foreclose the possibility of future mass arbitration claims. Although the ultimate proposal to solve this problem is the implementation of altered user agreements that are far more elaborate and explicit than the agreements that currently exist, this Note still nonetheless evaluates the consumer protection ramifications of adopting such waivers in this context.

Keywords

Fantasy Sports, Gaming, Sports Law, Consumer Protection Law, Gambling, Legislation, Email, Telecommunications, Internet, Right of Publicity, Intellectual Property Law

Disciplines

Consumer Protection Law | Dispute Resolution and Arbitration | Entertainment, Arts, and Sports Law | Intellectual Property Law | Law | Legislation

Recommended Citation

Samuel Ditchek, The Need for Adopting Mass Arbitration Waivers in the Online Sports Betting Industry, 23 Cardozo J. Conflict Resol. 187 (2022).
Available at: https://larc.cardozo.yu.edu/cjcr/vol23/iss1/6