The federal suit filed in Manhattan by Adam Johnson of Kentucky and four others seeks an injunction in the New York court that would bar either of the companies from using customer accounts to operate its business and compel them to submit evidence that accounts holding fantasy player funds would be available immediately if a customer wanted to pull money out.
Johnson's case was the first class action lawsuit that named the daily fantasy companies as defendants. In the 10 days since his action, another 10 suits have been filed.
While the two sites have maintained they have kept accounts separate as required by the Fantasy Sports Trade Association, the motion for the injunction points out that sites such as Full Tilt Poker made similar assertions but, in reality, could not pay the $350 million owed to customers.
"There is high risk of customers having accounts frozen or otherwise losing access to funds as defendants continue to spend tens of millions of dollars on television advertising but lose users and face heavy scrutiny from federal and state authorities," the motion for the injunction said.
Attorney Jasper Ward, who is part of a legal team representing the five players, said in a statement that while he doesn't doubt the statements made by the two companies, "we feel customers deserve some independent assurances that their money is actually protected in separate accounts."
When contacted Monday night, FanDuel spokesperson Justine Sacco said player funds are held in a dedicated master client funds account that is separate from the company operations account and money can be withdrawn at any time.
A DraftKings spokesperson said the company does indeed segregate accounts, and not only are there no restrictions on a fantasy player's ability to withdraw money but also, "at no time are DraftKings liabilities to players greater than the amount of money we have on reserve."
Nevada board: DFS is gambling, needs license
ESPN gambling writer David Purdum discusses the impact the ruling by the Nevada Gaming Control Board could have on the future of daily fantasy sports.