DraftKings announced earlier this week it would file a motion to dismiss a lawsuit that alleged it colluded with a prominent sports bettor to abed a violent attack on a former VIP customer. The company forcibly pushed back against these accusations in prior court documents.
An anonymous New York resident filed a suit in April seeking at least $1 million in damages against DraftKings, alleging that higher-ranking company officials leaked confidential information to professional sports bettor Gadoon “Spanky” Kyrollos more than a year earlier. The suit further alleges in March 2023 a masked assailant, under Kyrollos’ orders, physically grabbed the plaintiff and threatened to kill him if he didn’t turn over $500,000.
The claims that DraftKings worked with Kyrollos to help extort a former customer are “implausible and baseless,” lawyers on behalf of the company wrote in a court document dated May 1.
“(The) plaintiff fails to state claims for aiding and abetting assault and battery, intentional infliction of emotional distress, and negligence claims against DraftKings,” according to the letter.
Kyrollos was not named as a party in the suit.
The U.S. District Court for the Eastern District of New York set the June 28 deadline for DraftKings to file its motion to dismiss. The plaintiff will then have 30 days to respond, after which DraftKings can further reply to such motion. A decision on dismissing the case could come as early as August.
Salacious allegations raise larger questions
The allegations that one of the nation’s biggest sportsbooks had colluded with a well-known pro sports bettor in a violent assault against a former customer rattled the gaming industry after the suits’ existence was reported publicly by Next.Io on Tuesday. Within hours of the disclosure, multiple significant questions arose from the plaintiff’s suit.
Beyond the implausibility of such an accusation, the connection between DraftKings and Kyrollos remained tenuous at best.
Kyrollos has railed against DraftKings and many other major regulated sportsbooks to his more than 40,000 followers on X (Twitter) for not allowing him to place bets. On its face, it seemed preposterous that the “upper echelon” of a multibillion-dollar company, as alleged in the suit, would team up with a well-known, outspoken critic to arrange a death threat over half a million dollars.
The plaintiff, filed in the complaint as a “John Doe,” also alleges DraftKings intentionally locked him from his sports betting account by changing the associated email address. Such a move would be a massive breech of state gambling regulations and derail the customer protections and public trust that has made DraftKings one of the nation’s highest-grossing sportsbooks.
Plaintiffs’ lawyer, identity also sparks inquiries
Further investigations from multiple outlets indicate that Doe is Steven Jacobs, the plaintiff's lawyer. DraftKings has filed a separate motion requiring Doe to use his real name if the case proceeds, arguing the plaintiff’s anonymity would be prejudiced against the company.
The court has given both parties until the end of July to file their motions and response, respectively, about preserving Doe’s anonymity.
As either lawyer, plaintiff or both, further investigations generated additional questions about Jacobs’ background.
Jacobs made a name for himself on the professional poker scene in the early 2000s under the name “Stevesbets.” He won nearly $200,000 at World Series of Poker events between 2005 and 2007.
Roughly a decade later, Jacobs painted himself in an unrelated prior lawsuit as a compulsive gambler after he lost more than $300,000 of a former roommate’s money gambling and argued in court that he shouldn’t have to return the loan. He was ordered to repay the money in 2020.
In a lengthy X post released Tuesday, Kyrollos wrote that Oscar Jones, an associate of his named in the lawsuit, had worked with Jacobs to win tens of thousands of sports bets at DraftKings. When Kyrollos and Jones asked Jacobs for their share of the winnings, Jacobs allegedly tried to evade them.
To avoid paying back the money, Kyrollos wrote on X that Jacobs had abused his position as an attorney at the Herbert Smith Freehills law firm to file a false claim with New York gaming regulators. Jacobs was reportedly terminated from his firm the day after the original story was published.
"The evidence seems to show that Steve Jacobs is either a sick compulsive gambler or a thief.” Kyrollos posted on X. “My bet is on both. Either way he needs help."
My statement:
— spanky (@spanky) June 26, 2024
Let’s address Mr. ‘John Doe’ aka Steve Jacobs (Yes, you read that right, the plaintiff and the plaintiff’s attorney are the same person!)
Plaintiff / plaintiff's attorney Steve Jacobs is also a Senior Attorney who works at Herbert Smith Freehills Law Firm in New… pic.twitter.com/lzZqxfbJwQ
Bottom line
Court documents expected to be released in the coming days and weeks will shed better light on the suit, but the wild claims against DraftKings and Kyrollos seem like something from a work of fiction.
