In the latest between two feuding sportsbook operators, Fanatics is accusing DraftKings of a "culture of retribution" in a Thursday court filing.
The sports merchandise giant and relative newcomer to the legal sports betting industry is backing its new VIP lead Michael Hermalyn in a nasty legal battle.
Hermalyn left a similar role at DraftKings just days before Super Bowl LVIII for Fanatics, and his former employer is suing him for allegedly stealing confidential information.
In a court filing, Hermalyn’s team submitted a new legal brief in U.S. District Court in Massachusetts alleging that DraftKings is making “over-the-top accusations - that are directly contrary to the evidence and DK’s own internal records.”
The language cites DraftKings’ apparently “long history of aggressively smearing employees who leave or seek greener pastures with other employers” and how in this particular case it “liberally distorts reality and resorts to unnecessary character assassination” of Hermalyn. Fanatics holds that its competitor is simply using the Hermalyn case to make an example of him to dissuade other DK employees “attempting to flee a culture of retribution.”
The filing also states that 186 DraftKings employees have applied for a job at Fanatics since 2021 when Fanatics announced it was launching its online sportsbook.
Latest in back-and-forth
This new legal move asks the court to deny DraftKings’ recent request for a preliminary injunction against Hermalyn, which the Boston-based operator submitted earlier in March.
DraftKings initially requested that the courts bar Hermalyn from working with his new employer, but U.S. District Court Judge Julia Kobick waived that request, allowing Hermalyn to join Fanatics under the premise that he would not use any information from his former company or solicit DraftKings’ clients or employees.
Is this a case of alleged corporate espionage, which is what DraftKings is calling the messy situation, or is this all just a “fabrication” of a “salacious narrative” like Fanatics claims it to be?
Formerly, Hermalyn led VIP customer operations for DraftKings, but was anointed president, VIP at Fanatics in early February reporting directly to Fanatics CEO Michael Rubin. His former employer accuses him of being embroiled in a dynamic “scheme” to clone the VIP business for Fanatics.
In the latest court documents, his new employer argues that “this is not a case in which an employee was hired to move a book of business from one company to another” because of the sheer fact that Fanatics already has 100 million customers in the U.S. On top of that, Fanatics is asserting that it’s well known that many of the tens of thousands of VIP customers for both operators overlap.
