Judge Rules Steven Jacobs’ Lawsuit Against DraftKings Can Proceed

A federal judge in New York has ruled that portions of Steven Jacobs’ lawsuit against DraftKings can proceed.

Judge Natasha C. Merle of the United States District Court for the Eastern District of New York dismissed his claims for intentional and negligent infliction of emotional distress, but denied DraftKings’ motion to dismiss the aiding and abetting assault claim.

DraftKings Alleged to Have Aided and Abetted Assault

Jacobs was a high-stakes bettor and VIP client with DraftKings for over a year. The complaint alleges that in February 2023, Jacobs was targeted by Gadoon “Spanky” Kyrollos, another well-known bettor who demanded money from his account.

Kyrollos allegedly warned Jacobs that he had “dangerous associates” and contacts in DraftKings “upper echelon” who could access private customer data at a click.

Jacobs alleges reporting the threats to his VIP host, who promised to protect his private data. He then says that Kyrollos’ associate Oscar Jones had received his details from DraftKings. He further alleges that DraftKings allowed Spanky to access his account information at a sports betting conference despite being flagged.

In March 2023, Jacobs was assaulted by a masked man on a subway. The assailant is purported to have grabbed his arm, twisted it and issued a death threat, demanding that Jacobs pay money to Oscar Jones or “face further consequences.”

Jacobs then alleges that his DraftKings account email had been changed in October without prior authorization, preventing him from accessing his account. Upon contacting a VIP host, the host stopped responding, reportedly under orders by the company’s management. Jacobs claims this constituted a deliberate cover-up by DraftKings executives.

DraftKings moved to dismiss the case, arguing that its employees were not acting within the scope of their employment when the alleged leaks and threats occurred. It also stated that Jacobs failed to provide a direct link between DraftKings’ actions and the alleged assault. Its final claim was that it had policies to protect customer information, making any alleged leak outside company guidelines.

Judge Merle ruled that the claims for aiding and abetting assault and battery and negligent supervision could proceed, citing “plausible allegations that DraftKings employees may have facilitated the threats against him.” The court also noted that Jacobs notified DraftKings of the threats before any action occurred, but the company did not share the information internally.

At the same time, the court dismissed Jacobs’ intentional infliction of emotional distress (IIED) claim, stating that DraftKings’ alleged misconduct did not reach the “extremely high” standard required.

Given that the claims remain active, DraftKings will now face discovery proceedings where further details regarding the company’s alleged details could emerge.

A Bumpy Start To 2025 For DraftKings

DraftKings reported strong fourth-quarter results and anticipates further growth in 2025. The company has been dealt significant blows recently, after its lottery courier service, Jackpocket, was ordered to cease operations in Texas and withdrawn in New Mexico.

The company is reported to be investigating the potential for sports events contracts, regulated by the Commodity Futures Trading Commission, and crypto sportsbooks, with Jason Robins, the company CEO, refusing to rule it out on a recent analyst call.