Underdog is facing a class action lawsuit in New York over allegations of operating an illegal online sports betting platform.
Three plaintiffs have filed a class action suit against Underdog in the U.S. District Court for the Eastern District of New York in an attempt to recover losses from its alleged operation as an illegal sportsbook. The plaintiffs allege Underdog violated state gambling laws and engaged in illegal deceptive activity by operating an illegal online sports betting platform that it “falsely markets as an interactive fantasy sports game.”
The plaintiffs Brian Ballentine, JeanClaude Lominy, Lauren Wolf, Isaac Roth and class members brought the suit to recover their losses, costs and attorneys’ fees.
The three lead plaintiffs are resident of New York, California and Texas. The plaintiffs contend New York is a proper venue since the company is headquarted there.
The plaintiffs claim Underdog operates an illegal online sportsbook by offering real-money games that are “neither interactive nor fantasy” because Underdog customers are not competing against other customers, but against the house.
The plaintiffs also allege Underdog of providing sports betting without proper licensing.
Underdog has been accused of operating without proper licensing but the company acquired a license to provide operations in New York that went into effect in December 2022.
Class action members
The class action suit defines the class of Underdog customers who are eligible for relief as “all persons in the United States who lost money by wagering in pick’em style betting on mobile platforms provided by Underdog.” The relief plaintiffs are seeking in the suit is “the value of the money they paid into defendant’s illegal gambling platforms.”
Court documents do not provide an exact figure of potential class members but Underdog anticipates a favorable outcome for the gambling-related class action brought against it.
“Like most every other similar fantasy sports lawsuit that was cooked up by a plaintiff’s lawyer as a marketing exercise to generate business, this will get dismissed,” an Underdog spokesperson told SBC Americas.
Underdog handles regulatory scrutiny
The complaint cites recent action taken by regulators nationwide to prevent fantasy operators from offering contests that resemble sports betting and player prop wagering.
The class action suit cites recent regulatory changes made in Florida and Arkansas.
Last February, the Florida Gaming Control Commission sent a cease and desist letter to Underdog demanding the company shutter operations in the Sunshine State. Underdog confirmed to SBC Americas that it planned to exit Florida’s gaming market amid the letter.
The commission also sent cease and desist letters to PrizePicks and Betr.
The Arkansas Department of Finance and Administration also sent cease and desist letters in 2024 to Underdog and PrizePicks for their offering of prop-style contests.
Regulators in Massachusetts have also taken a stance against prop-style contests. Underdog faces a similar class action in the state along with PrizePicks and Yahoo.
Law firm founder Joseph P. Curran filed a suit in the Essex County Superior Court seeking damages against Underdog, PrizePicks and Yahoo for operating illegal sportsbooks.
Curran argued that these fantasy operators were operating in violation of the law and claimed the companies profited over $10 million a month in revenue from these actions.
