DFS giants DraftKings and FanDuel have won a class action lawsuit, brought by a group of college football players, that posed a potential existential threat to their business model.
Former northern Illinois University football players Akeem Daniels, Cameron Stingily and Nicholas Stoner claimed in their filing that the sites had used their names and images unlawfully. They brought the case on behalf of all football players in America.
At the time of the lawsuit appeared, in 2016, both sites offered contests on college football and basketball, although they subsequently ceased to do so as part of an agreement with the NCAA later that year.
On Friday the suit was dismissed by the US District Court for the Southern District of Indiana, which ruled that the use of football players’ names and images was legal under Indiana law due to allowable exemptions based on the newsworthiness and public interest of the plaintiffs.
According to the law, a “person may not use an aspect of a personality’s right of publicity for a commercial purpose during the personality’s lifetime or for one hundred (100) years after the date of the personality’s death without having obtained previous written consent…” The term “right of publicity” includes an individual’s name and likeness.
But FanDuel and DraftKings argued their usage was exempt from the general prohibitions of the Indiana statute, that it was protected under the First Amendment to the US Constitution, and that copyright laws protected them from liability.
It was the first time the court had had to define “newsworthiness” in relation to a copyright case and it chose to define it broadly. It accepted that the notion of newsworthy extended beyond the dissemination of current affairs and into the realms of data and entertainment.
Thus, the achievements of athletes are considered to be “newsworthy” because they are closely followed by a large segment of the public.
The court concluded that DraftKings and FanDuel could be seen as “reference sources” for those consuming sports in general.
“The Court acknowledges that this is a close call,” wrote the judge. “But given Indiana’s interpretive preference to read statutes in a manner that avoids constitutional issues, as well as other Circuits’ reasoning on similar issues, the Court concludes that Defendants’ materials constitute ‘reporting.’”
Neither DraftKings nor FanDuel offered have comment on the courts’ decision but they’re likely breathing a sigh of relief.