【reddit stake】-Major US sportsbooks hit with lawsuit in Washington DC

The suit, filed by a specially formed entity called DC Gambling Recovery LLC, argues the district’s Sports Wagering Lottery Amendment Act which legalised sports betting was constitutionally unsound.

Five US operators have launched in DC since Intralot’s sports betting monopoly fell apart last year, including FanDuel, DraftKings, BetMGM, Ceasars and Fanatics.

While the complaint was initially filed in DC Superior Court at the end of February, it has since been removed to the US District Court for the District of Colombia.

US civil defendants often attempt to move cases to federal court where plaintiffs in practice face harder barriers to success.  

The complaint argued that Murphy v. NCAA, the 2018 Supreme Court case that overturned PASPA and opened the door to US sports betting, should not apply in DC, because it was ruled on Tenth Amendment grounds.

This part of the US Constitution says any powers not reserved for the federal government should be delegated to the states, which the US capital city does not qualify as.

The attorneys wrote: “The District apparently thought that the Supreme Court’s New Jersey decision meant that PASPA no longer applied to it.

“But that is wrong: the Tenth Amendment does not apply to the District of Columbia, so PASPA’s prohibition remains in full force in the District. The SWLAA is thus without any legal force or effect.”

DC firm highlights Stuart-era law in filing

The lawyers, employed by boutique law firm Kellogg, Hansen, Todd, Figel & Frederick, also highlighted the 1710 Statute of Anne remains in effect in the district.

This is the law that makes gambling debts under $25 unenforceable and allows for others to sue on the loser’s behalf if no claim is brought within three months.

As such, DC Lottery Recovery LLC is suing the sportsbooks for all customer losses over $25 and treble in damages.

The complaint stated: “Between brick-and-mortar books (like Caesars Sportsbook) and their digital equivalents, DC gamblers now wager (and lose) tens of millions of dollars each month on sports gambling.

“And that number is rising quickly, reflecting an unprecedented public health crisis of gambling-related addiction, especially among some of the DC-area’s youngest and most vulnerable residents.”

The lawsuit is just the latest twist in the tumultuous story of DC’s sports betting market, which in April 2024 was opened up to the major commercial betting operators following the fallout of the perceived failure of the previous monopoly, run by Greek lottery supplier Intralot.

Many of the details regarding Intralot’s contract with the city are controversial, and the business was fined $5m in January by the DC Council for breaching its provisions.