California judge sends Fliff lawsuit to arbitration

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It was a victory for not just Fliff but other gaming companies, as a California court agreed with the company’s assertion that the arbitration in the terms and conditions of the sweepstakes sportsbook is binding.

In her order granting the request to send the case to arbitration, Judge Sunshine S Sykes concluded that Fliff’s claims that the law of Pennsylvania should dictate the action had merit. Plaintiff Bishoy Nessim argued that because most of Fliff is now based in Texas that the ties to Pennsylvania lacked merit. Sykes disagreed.

“Despite the seeming unfairness of the situation as it exists, with Fliff being able to claim a connection to Pennsylvania despite it having moved to Texas where it now runs its business from, the Court finds, because Fliff’s principal place of business “at the time of contracting” was Pennsylvania, there is a substantial relationship between Pennsylvania and the Parties,” Sykes wrote in her judgment.

Now that Sykes has granted Fliff’s motion to send the case the arbitration, the matter is closed in the courts.

Sykes also noted that arbitration agreements remain a hot topic in the court and went into a detailed discussion about the nature of Fliff’s arbitration agreement. Sykes did concede that the phrasing of the agreement referenced American Arbitration Association (AAA) rules but did not provide enough context for an “unsophisticated party”. Accordingly, Sykes concluded the court could decide the “arbitrability” of the case, which she did in a nuanced discussion.

One highlight of that discussion was analyzing Nessim’s assertion that he lacked any other alternatives in the market. Nessim’s argument in the court said that Fliff was an illegal sportsbook. Sykes then took his own words and noted that, if he believed it was illegal, there were plenty of other black market options in California he could have used instead.