The Jacksonville Jaguars are reportedly asking FanDuel to return $20 million a former employee stole to use on daily fantasy and sports betting.
ESPN reports that FanDuel is balking at the request.
In December, former Jaguars employee Amit Patel was charged with wire fraud and illegal monetary transactions after he allegedly stole over $22 million from the team using a virtual credit card. Patel was a “high-volume, high-stakes” daily fantasy (DFS) player per ESPN, and reportedly was “known for racking up big losses.”
One source told ESPN that the Jaguars, FanDuel, and the NFL were discussing a settlement, but it seemed unlikely the team would receive the money.
The source familiar with the situation said discussions are ongoing among FanDuel, the Jaguars and the NFL on what the source called “a settlement.” However, the source said, “The way they see it … we got this money fair and clear. It’s not our problem that we have to forfeit it back to you.”
“I would be gobsmacked if it happened,” the source added.
Because Patel’s focus was more on the DFS side rather than sports betting, FanDuel’s obligations are cloudier.
It’s not clear what recourse the Jaguars might have to recoup the losses. Under federal law, FanDuel has an obligation to make sure funds used for sports betting were legally obtained, but the regulations are murkier for daily fantasy.
“Gambling sites have a duty to perform ‘Anti-Money Laundering’ and ‘Know Your Client’ procedures to ensure they do not onboard funds of an illicit origin,” said Stephen Bell, an attorney who practices in white-collar criminal cases. “Where the size of a customer’s bets far outweighs their income, red flags are present and should require additional due diligence to confirm the funds are clean.”
Patel, under his “ParlayPicker” handle, was described as “the biggest loser ever on FanDuel” and “legendarily bad” by one DFS player. He was called out for “loose play and rookie mistakes,” including picking players not starting and not submitting rosters for pools with expensive buy-ins.
I think FanDuel and the Jaguars will end up getting a deal done, if only to avoid a potentially consequential ruling about whether or not daily fantasy sports is considered gambling and subject to the same anti-money laundering laws as sports betting. If a ruling went against FanDuel, it could end up spurring changes across the entire industry.
[ESPN]
