Fantasy Sports Betting Site in Georgia Gets Sued

Although retail sports betting in Georgia still has not been approved, it turns out the state still isn't immune from legal issues.

A popular daily fantasy sports betting site is currently being sued in Georgia. The plaintiff alleges that the website in question, PrizePicks, stole proprietary technology that enables them to offer "prop-style, over-under fantasy sports games." The suit is apparently years in the making, and the plaintiffs, as a result, are seeking steep retribution.

Naturally, plenty of questions are being raised in the wake of this lawsuit. At the top of the list: What's exactly going on here? Are daily fantasy sports betting websites even allowed to operate in Georgia? And finally, could the outcome of this impending litigation impact the future of legal sports betting in Georgia?

Let's break down the latest bit of drama in The Peach State.

Wait, I Thought Online Sports Betting Sites Weren't Allowed to Operate Inside Georgia?

Confusion tends to run rampant when discussing this subject. And rightfully so. It can be difficult to differentiate between daily fantasy sports and retail gambling operations.

It's true that online sports betting sites aren't allowed to operate in Georgia. And that's not going to change anytime soon. The most recent Georgia sports betting bill just flopped, much like all of its predecessors. If residents of The Peach State want to bet on sports, they're still required to suss out alternatives. Sometimes that entails traveling to a different state. It can also be as simple as checking out some of the best online sports betting sites for the USA that are located abroad. These operators typically allow almost anyone in the United States to set up and service an account.

However, daily fantasy sports betting sites are yet another alternative gambling enthusiasts can consider. Georgia doesn't explicitly allow them. But they also don't have any particular policies against them. Daily fantasy sports betting sites have long been a loophole in states that don't have legal gambling. Georgia is no different.

To be sure, state officials in places such as The Peach State generally aren't happy about it. There's also little they can do. Federal laws specifically exempt daily fantasy sports from the "prohibitions of the Unlawful Internet Gambling Enforcement Act." That has allowed them to reach clients in states without retail sports betting.

Of course, some states have been able to pass legislation that bans daily fantasy sports betting sites. New York did just this until it officially legalized gambling in 2022. Nevada actually displaced all the best daily fantasy sports betting sites from their market even though they have legal sports betting. But Georgia hasn't journeyed down that path, in large part because many have simply assumed retail sports gambling would soon be legal and render the issue moot.

Full Details of the Lawsuit Filed Against PrizePicks

The company that has filed the lawsuit against PrizePicks is Vetnos LLC, which classifies itself as "a business-to-business fantasy sports provider." The backstory on this motion is pretty extensive. Fortunately Sam McQuillan of Legal Sports Report relayed all of the necessary details, which you can see below:

"[Vetnos LLC] filed a patent infringement and trade secret misappropriation complaint [on June 20] with the Northern District of Georgia after years of allegedly trying to do business together. It claims its patented fixed-odds fantasy technology is the same software that runs PrizePicks’ players vs house games. Vetnos wants interest on lost profits, royalties, and additional monetary damages for allegedly jeopardizing trade secrets from a former employee. Vetnos claims it repeatedly warned PrizePicks CEO Adam Wexler of the potential copyright infringement involved with its product, including during an alleged meeting between Orlow and Wexler at the SBC Summit in New Jersey in 2021.

"The company also claims a former employee (Steven Kerstein) from its predecessor, Game Sports Network, aided in 'copying' Vetnos technology. After working in risk management for GSN’s technology, Kerstein moved into a consulting role with PrizePicks in 2018, according to the complaint. Vetnos claims he sent confidential information concerning the technology to his personal email before leaving GSN, breaching a non-disclosure agreement. Kerstein now heads company relations and market intelligence at PrizePicks."

PrizePicks has repeatedly and aggressively denied these allegations, speaking on the record numerous times about the would-be charges levied against them. They apparently plan to fight the litigation every step of the way. Members of PrizePicks legal team also maintain that it's easy to point out inconsistencies and inaccuracies in the filing. They seem to believe their information will exonerate PrizePicks of any liability.

Could the PrizePicks Lawsuit Jeopardize the Future of Sports Betting Sites in Georgia?

Many have wondered whether the PrizePicks issue could leave a stain on the sports betting community in general. And that, in turn, could risk the legalization of retail sports gambling down the line.

In this case, that means next year. Advocates are expected to make another run at Georgia sports betting during the next round of legislative meetings. If a sports betting adjacent company allowed to operate in the state is found guilty of stealing tech, it will serve as fodder for the industry's strongest opponents.

At the same time, the outcome of this case probably isn't worth worrying about. Sure, PrizePicks could be in loads of trouble if they're not absolved. (They reportedly have until July 11 to present their official counter response to the filing.) We could certainly see a scenario in which this issue leads Georgia to expel daily fantasy sports betting sites from the market altogether.

Retail sports betting hopefuls have very little to worry about, though. The industry is different. Plus, Georgia state officials have generally been concerned about the moral and socioeconomic impact of legal sports betting. They aren't as hung up on what amounts to corporate espionage among competitors.

Whether Georgia sports betting gets the green light next year or anytime soon remains to be seen. Just know that if it doesn't, the lawsuit against PrizePicks will have little, if not nothing, to do with it.

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