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The Indiana Supreme Court issued a ruling in favor of sports betting and daily fantasy sports titans DraftKings and FanDuel on Wednesday, Oct. 24. The ruling is positioned to have long-term effects on legal precedent with regard to the use of player likenesses and statistics.
The case history
The case, commonly referred to as Daniels v. FanDuel, stems from a lawsuit brought to US District Court in 2016 by three former college football players against the two companies. The suit alleged that the companies violated Indiana’s “right to publicity” law.
According to the language of the law, no entity can use “an aspect of a personality’s right of publicity for a commercial purpose … without having obtained previous written consent.” So, the players felt they had been materially damaged by the DFS giants.
However, attorneys for the two companies quickly filed motions to dismiss the lawsuit. They argued that the companies’ usage of the players’ information fell under two exemptions to the law.
Specifically, the law allows for persons or companies to use other people’s information if that information is deemed “newsworthy” or of “public interest.” In addition, the companies also made a First Amendment argument.
The court ultimately agreed with DraftKings and Fanduel, dismissing the case in September 2017. However, the dismissal came on the grounds of the exemptions. In the court’s eyes, the First Amendment argument definitively held no water.
The dismissal did not end the argument for the players, though. They immediately appealed the decision to the Seventh Circuit Court of Appeals.
Since the issue at hand dealt with Indiana law, the Seventh Circuit turned to the Indiana Supreme Court for assistance. The appellate court sent the state justices a Certified Question about “whether online fantasy-sports operators that condition entry on payment, and distribute cash prizes, need the consent of players whose names, pictures, and statistics are used in the contests, in advertising the contests, or both.“
So, beginning in June 2018, the Indiana Supreme Court began considering whether the usage of player data was exempt. Ultimately, the high court ignored the question of public interest but found that the players’ likenesses were, indeed, newsworthy.
As such, the Court ruled that DraftKings and FanDuel operated under one of the law’s exemptions. His opinion stated the ruling thusly:
In short, we answer this question narrowly and find online fantasy sports operators that condition entry to contests on payment and distribute cash prizes do not violate the Indiana right of publicity statute when those organizations use the names, pictures, and statistics of players without their consent because the use falls within the meaning of “material that has newsworthy value,” an exception under the statute.
What does the ruling mean, and what doesn’t it mean?
This ruling would seem to be the deathblow for the athletes’ case. However, it’s important to remember that the ruling is merely a response to the Seventh Circuit’s question.
Of course, the law does not obligate the Seventh Circuit to follow the Indiana Supreme Court. However, it most likely will do so and dismiss the case.
Technically, the plaintiffs could choose to submit an appeal to the US Supreme Court. Whether they will do so remains unclear at this time.
However, this case creates an important piece of legal precedence. The likely ruling from the Seventh Circuit Court will establish that daily fantasy sports providers and sportsbook operators are not bound to compensate anyone for the use of data and likenesses.
Since the dismissal of PASPA, the major sports leagues have argued that state sports betting laws must designate official data providers for sportsbooks. This case could conceivably become part of the counterargument to those sorts of claims.
As it happens, Indiana is one of those states considering the addition of sports betting. So, this ruling so close to home may cause the leagues to shift their tactics.