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The nuances in legal standards from one jurisdiction in the United States to the next that online gambling companies have to consider go beyond gambling regulations. Statutes governing general commerce on the Internet are also applicable in many ways.
California has unique online privacy laws, and that section of the state’s code is currently of particular interest to FanDuel’s legal counsel. A resident of that state alleges FanDuel has violated those rules and has sought a remedy through a federal court.
Mitchener v. FanDuel voices privacy concerns
The complainant in this matter, Courtney Mitchener, is a California resident who filed the lawsuit in the federal court for the district of central California on July 30. Mitchener is asking the court to certify a potential class of “all persons within California who within the statute of limitations period communicated with Defendant (FanDuel) via the chat feature on Defendant’s Website using cellular or landline telephony, and whose communications were recorded and/or eavesdropped upon without prior consent.”
As far as the potentially illicit behavior goes, the allegations center around California’s “Trap and Trace Law.” That statute makes it illegal for entities to track the digital activity of a person in the state without explicit and prior consent.
According to Mitchener’s complaint, FanDuel allegedly deployed software developed by TikTok to capture details about website visitors without obtaining necessary consent. Besides certifying the class, Mitchener wants the court to declare FanDuel in violation of the California statute and award class members appropriate damages.
So far, FanDuel has not filed a response. If the case goes to trial, the onus will be on the complainant to substantiate that FanDuel’s practices violate California law.
Details of the allegations and the burden of proof
The rather brief complaint contains as evidence screenshots of code from FanDuel’s website. While FanDuel does not offer online casino games or online sports betting in the state, Californians can still access those sites to a small extent and FanDuel does accept paid daily fantasy sports contest entries in California.
The code in the screenshots attempts to prove the usage of TikTok’s tracking software on FanDuel’s website. Mitchener’s complaint claims that the software “collects as much data as it can about an otherwise anonymous visitor to the Website and matches it with existing data TikTok has acquired and accumulated.”
To further support the allegation that FanDuel’s website violates the named statute, the complaint adds that “the TikTok software begins to collect information the moment a user lands on the website.” If true, that could prove the claim of FanDuel using this tracking software without requisite consent.
Because the action’s pursuant is a private citizen and not the state of California or the US government, this is a civil matter. That spells out potential outcomes for FanDuel if the matter gains momentum.
How this lawsuit could affect FanDuel’s operations
FanDuel will most likely both oppose the certification of the proposed class and ask the court to dismiss the lawsuit entirely. Any further action on FanDuel’s part will probably only occur pending the court’s denial of either motion.
If the complaint survives a probable motion to dismiss, the degree of FanDuel’s response would probably then depend on whether the court certifies the class. A positive ruling in that regard could make FanDuel more apt to offer a settlement.
Naturally, FanDuel could offer a settlement to Mitchener in any circumstance, and thus invoke the “write a check to make it go away” trope. Whether that will succeed will depend on Mitchener’s dedication to the principle over the payday.
Should Mitchener refuse and the case actually go to trial, a decision for the plaintiff could give FanDuel cause to rework its website, at least in terms of how California residents access it. It could be months or years before such an opinion would be issued, though, and FanDuel would have appeal options.
Such a decision would also set a precedent for future claims. If the petition to dismiss fails and the court certifies the class, that would increase pressure on FanDuel to settle, as the threat of discovery could as well.
Regardless of the outcome of this matter, this situation is a stellar example of the diverse compliance concerns that online gambling companies face across the US. These concerns are much broader than simply what language they can use in their US online casino advertisements.
