DraftKings will meet Friday’s deadline to file a motion to dismiss a federal lawsuit centered on allegations that several employees leaked personal data of an anonymous bettor in connection with an unconfirmed extortion plot.
U.S. District Court Judge Natasha C. Merle, a federal judge for the Eastern District of New York, imposed the deadline earlier this month while granting a t-request from the parties for an extension on several submissions. The motion will be served pursuant to the judges’ local rules, Sports Handle has learned, even if it is not posted on the court’s website on Friday. A spokesman for the court did not immediately respond to a request from Sports Handle.
The filing is expected days after reports surfaced on a bizarre extortion scheme allegedly involving one of the nation’s most recognizable sports bettors. The plaintiff, according to the suit, received perilous alerts in March 2023 that included threats on his life unless he paid a six-figure sum to Gadoon “Spanky” Kyrollos, a popular gambler. Several DraftKings staff , according to the suit, gave the plaintiff’s address, financial history, sports betting history, and other personal information to Kyrollos.
DraftKings vehemently denied the claims, describing the allegations as baseless. In a statement provided to Sports Handle on Tuesday, DraftKings asserted that the lawsuit filed against the company by an unnamed plaintiff this March was full of inaccuracies.
“In the complaint, the plaintiff does not identify any DraftKings employee, but rather alleges on ‘information and belief’ that an unknown and unidentified DraftKings employee provided private information to ‘Spanky’ and to additional unnamed third parties,” the statement reads.
The plaintiff initially filed the suit, John Doe vs. DraftKings, Inc., in Queens County, Supreme Court. Weeks later, the case was moved to federal court in the Eastern District of New York, home to a courthouse in Brooklyn.
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More than 15 months have elapsed since the purported altercation, one that apparently occurred on March 30, 2023, according to the plaintiff. On the morning in question, the plaintiff claims he was approached by a “masked man” on a subway platform in Long Island City, a neighborhood on the western tip of Queens. There, the presumed assailant grabbed the plaintiff, spun him around, and made disturbing threats, the plaintiff alleges. The plaintiff, who is represented by former Herbert Smith Freehills’ attorney Steven Jacobs, accused the individual of threatening to kill him if he did not make a $500,000 payment to Kyrollos.
Prior to the alleged incident, Spanky claimed weeks earlier that he had access to the “upper echelon” of DraftKings’ staff, according to the plaintiff. The plaintiff further alleged adding that the staff could provide Spanky with confidential information on the player’s betting history at an in-person meeting.
The plaintiff has sought damages against DraftKings for negligence, intentional infliction of emotional distress, and abetting assault and battery. In addition, the plaintiff accused DraftKings’ employees of conspiring to change his email address associated with the , according to Next.io, which first reported the lawsuit. DraftKings vigorously denied the charges of a security breach.
The story took a strange twist on Tuesday night when Spanky published his version of the events on Twitter. According to Spanky, the individual described as “John Doe” is not only the plaintiff, but also the attorney representing the plaintiff, the gambler wrote on his Twitter site.
Spanky outed the individual as Jacobs, a New York attorney. Furthermore, Spanky revealed that Oscar Jones, one of his friends, met Jacobs through a personal connection. Jones, according to Spanky, provided Jacobs with more than $82,000 of his own money to start a gambling partnership. Jones, in a separate lawsuit, itted to providing Jacobs with the funds for an with a legal sportsbook. Spanky, who claims he is restricted from betting at DraftKings, indicated that he relies on “whales” such as Jacobs to wager at establishments where he is prohibited.
Jacobs has not responded to repeated requests from Sports Handle for comment. On Wednesday, Sports Handle reported that Jacobs is no longer employed with the law firm, according to persons with knowledge of the situation. As of 5:30 p.m. ET on June 26, Jacobs’ bio no longer appeared on the firm’s website.
Jacobs, according to Spanky, won a substantial amount with DraftKings, prompting the group to attempt to withdraw a portion of the funds. The group, according to court filings, amassed gambling profits of $350,000, before DraftKings asked Jacobs to complete an affidavit for a withdrawal.
Spanky is still unsure of the exact whereabouts of an unconfirmed $200,000 withdrawal. In New York, it is illegal for a proxy to wager at a licensed sportsbook on behalf of a prohibited bettor.
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Ahead of the filing, James Sandnes, outside counsel for DraftKings, filed a letter to the court in May on behalf of the company. Sandnes, an attorney with Skarzynski Marick & Black LLP, stated several reasons why the court should dismiss the lawsuit. The disclosure of the plaintiff’s information and/or physical accosting of the plaintiff, if either act occurred, was not authorized by DraftKings, according to the attorney.
Moreover, the acts were not done within the employee’s scope of employment or to “further DraftKings’ interest,” Sandnes wrote. DraftKings, he argued, cannot be held vicariously liable for “torts of employees,” acting out of the scope of their employment. The plaintiff also failed to plead “causation or breach,” undermining his negligence and negligent infliction of emotional distress claims, according to the attorney.
In response, Jacobs wrote in a May 8 letter to the court that the plaintiff believes the DraftKings employees acted within the scope of their employment by allegedly leaking the information. Alternatively, the plaintiff argued that the lawsuit should proceed because DraftKings is liable for “negligent hiring, training, supervision, and retention” in connection with the alleged leak.
The plaintiff also alleged that the assailant stood outside his apartment for several hours before the apparent subway altercation. It is unclear in the lawsuit if a member of DraftKings’ “upper echelon” actually provided Spanky with the plaintiff’s address.
In 2007, CardPlayer described Jacobs as one of the world’s top heads-up, no-limit poker players. Jacobs also apparently represented a prominent poker CEO in an unlawful gambling case.
Under Merle’s order, the plaintiff has until to July 29 to file an opposition to the defendant’s motion. From there, DraftKings’ reply is due on August 8, shortly before the start of the college football season. Typically, a judge in a civil lawsuit will hold a pretrial conference, where a schedule for discovery may be set, before announcing a trial date.
The plaintiff also faced a separate deadline on Friday to file a motion requesting leave to proceed under pseudonym. Petitioners may bring a lawsuit under a pseudonym such as John Doe for privacy to avoid the risk of retaliation through harm. Alternatively, he had the option of informing the court that he no longer wished to proceed with the lawsuit. Efforts to Jacobs on Friday were unsuccessful.
