DraftKings Denies Allegations of Collusion with 'Spanky' in Extortion Attempt, Death Threats

Anonymous New York City resident filed a lawsuit that DraftKings leaked personal information to professional sports bettor Gadoon “Spanky” Kyrollos that was used as part of a $500,000 extortion attempt.

Ryan Butler - Senior News Analyst at Covers.com
Ryan Butler • Senior News Analyst
Jun 26, 2024 • 09:09 ET • 4 min read
Photo By - SIPA

DraftKings has denied allegations in a lawsuit claiming the sportsbook operator partnered with a prominent bettor to violently extort one of its VIP customers.

An anonymous New York City resident had filed a lawsuit that DraftKings leaked personal information to professional sports bettor Gadoon “Spanky” Kyrollos that was used as part of a $500,000 extortion attempt. John Doe’s suit further alleges a masked man, directed by Kyrollos and abetted by DraftKings, waited more than three hours to ambush him and threaten to kill him if he didn’t give the money.

When asked to comment, DraftKings said in a statement that “the complaint filed against DraftKings in March 2024 by an unnamed plaintiff is full of inaccuracies and baseless allegations.”

“In the complaint, the plaintiff does not identify any DraftKings employee, but rather alleges on 'information and belief' that an unknown and unidentified DraftKings employee provided private account information to 'Spanky' and to additional unnamed third parties,” read the statement.

“DraftKings has found no evidence of anyone at DraftKings providing plaintiff’s information to a third-party, and DraftKings denies acknowledging any such 'security breach.' Nor has DraftKings uncovered any improper activity by a DraftKings employee, or any activity on plaintiff’s account, relating to the allegedly unauthorized change of the email address associated with plaintiff’s DraftKings account.”

The company said it would file a motion to dismiss the case by June 28.

Lawsuit details

According to the suit, on the morning of March 30, 2023, the plaintiff left his apartment in Long Island City, New York to visit his Manhattan office. In the walk between his apartment and the subway platform, “a masked man grabbed him, violently spun him around, and threatened to kill him” if he did not pay half a million dollars to Kyrollos. 

Per the suit, filed by Doe’s attorney Steven Jacobs, security camera footage showed the man who issued the threat had waited more than three hours to confront Doe.

The suit further alleges Kyrollos and the masked man did not act alone. DraftKings, the sole defendant in the suit, “knowingly provided” the plaintiff’s address, as well as sensitive personal information, financial history, and betting history, leading Kyrollos to plan the threat. 

“DraftKings loaded the proverbial gun, and put it in Spanky’s hand,” the suit alleges. “(The) Plaintiff’s life was never the same.”

Per court documents in multiple unrelated cases, evidence indicates John Doe is Jacobs himself. Both the plaintiff’s occupation (lawyer) as well as home and work address mentioned in the DraftKings suit are the same as those of Jacobs. SBC Americas was the first to report on the connection between Doe and Jacobs.

A voicemail left with a phone number under Jacobs’ name in the court filing was not returned at the time of publication.

DraftKings has asked the court to no longer allow the plaintiff to proceed under a pseudonym, arguing that previously submitted court documents already revealed his name and that anonymity doesn’t offer protection. A ruling is expected by August.

Doe, or Jacobs, is seeking at least $1 million in financial compensation.

More information

Kyrollos is one of the most prominent professional sports bettors online. He also hosts the annual BetBash networking conference that draws hundreds of sports bettors and gaming industry figures.

John Doe, who said in the court documents he was a former DraftKings VIP customer, details that over the ensuing months, DraftKings allowed a hack into his personal information that was then passed on to Kyrollos. He alleges DraftKings stonewalled him when he tried to find out more information. 

In a separate court case, Jacobs disclosed he was a high-volume DraftKings customer. 

Doe further alleges DraftKings allowed an email account change in the middle of the night that effectively shut him out from his account. This then allowed Kyrollos and/or his associates access to personal financial and location information that in turn opened the door for the death threat.

“This is a case about DraftKings – one of the biggest and most profitable sports betting companies in the world – knowingly and willfully aiding and abetting a violent assault, battery, and death threat, (and later, a significant computer hack),” reads the lawsuit.

DraftKings denied the allegations in court filings, saying the plaintiff “fails to state claims for aiding and abetting assault and battery, intentional infliction of emotional distress, and negligence claims against DraftKings"

"These implausible and baseless allegations fail to state any viable cause of action,” DraftKings legal council wrote in documents submitted to the court.

The lawsuit was filed in Queens County Supreme Court in April 2024. The case has since moved to U.S. District Court for the Eastern District of New York. Next.io first reported publicly on the case Tuesday.

Questions remain

The incendiary accusations against one of the nation’s most prominent sportsbooks and sports bettors leave more questions than answers.

Doe alleges DraftKings fed Kyrollos and his posse key information that made him a target, but it's unclear why a multi-billion-dollar publicly traded company would help extort a customer for $500,000. Kyrollos, who has been featured in multiple media profiles over decades as a prominent sports bettor, has railed against larger U.S. sportsbook operators, which he says have banned him due to his betting success.

In November 2021, Spanky’s X account posted, “Let this be a wake up call to all you DK customers out there. From the CEO himself: You are only welcome at DraftKings if you wanna (sic) bet for “fun” and be a guaranteed loser.”

It’s also unclear why Kyrollos or his associates would need DraftKings to provide residency information that is publicly available online. It’s also unclear why a bettor who has touted and capitalized on the financial and branding success as a winning bettor would violently extort someone. 

DraftKings makes many of these points in court filings. Legal council for John Doe alleges his clients’ statements lay out proof that actions from the “upper echelon” of DraftKings officials led to the alleged death threats during the incident on March 30, 2023.

Court documents say Doe filed a police report on the day of the alleged death threat, but neither Kyrollos nor any other figure involved in the actual incident is included as a defendant in the civil suit.

Kyrollos took to X on Tuesday night to share his side of the story. In a lengthy post, he reaffirmed the connection between Jacobs and John doe and wrote "the evidence seems to show that Steve Jacobs is either a sick compulsive gambler or a thief. My bet is on both. Either way he needs help."

Next moves

DraftKings is expected, by the end of June, to file a motion to dismiss the case. Jacobs, on behalf of Doe or himself, will then have about a month to refute DraftKings’ claim, and DraftKings can then answer that motion. A dismissal ruling is expected by as early as August.

If the court does not agree with DraftKings and allows the case to proceed, it will likely be several months before a decision is issued. The two sides could also settle out of court.

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