DraftKings' & FanDuel's Terms of Service Still Have Weaknesses

Sep 8, 2016 9:00:00 AM

Since we last discussed fantasy football, we looked at DraftKings and FanDuel who had faced a number of lawsuits back in 2015 resulting in a federal inquiry. On top of the lawsuits suggesting fraud, negligence, false advertising and more, the fantasy sports moguls had Terms and Conditions binding users to even more provisions in which the validity and enforceability of the terms was questionable. Companies like Safeway and Zappos have been thumped in class action lawsuits because they failed to follow best practices for display and tracking that left their Terms of Use unenforceable. Pending additional lawsuits, it looks as if these fantasy sports sites could be candidates for similar accusations.

Last year, FanDuel’s click-through registration form was a mess. There was no way to indicate that a user had actively agreed to their terms as they were only linked in tiny print at the bottom of their sign-up flow. DraftKings was in an infinitely better situation. They included a check box for users to accept their legal terms and a separate button to click that finalizes signing up for their service. Explicit notice and agreement of online terms! We love when websites do this right!

So, where are these companies now, you ask? With fantasy football drafts running rampant, we had to see whether DraftKings and FanDuel are setting themselves up for false starts from the get-go, or gaining some positive yardage for the 2016 football season.

Let’s start with DraftKings, the front-runners in the legal game last season as far as clickwrap best practices went. Their sign up flow is still in tact and now includes a space for users’ birthdates to be entered. That covers them on the gambling side of things in which they must adhere to state regulations. Proof of customer assent is given an additional boost with the birthdate addition to their sign in flow. If taken to court based on their terms content, they now have verifiable age component, putting users at fault if they lie about their age.

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DraftKings has yet to recover the ball in regards to the content of their Terms of Use. They still have the caveat section of, “Oh, we can change these terms any time we want and you have to be okay with it!” However, because of the great clickwrap, if taken to court, there is a likely chance that they can prove users agreed to that...the below provision included.  

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FanDuel has yet to change their ways and is still offsides when it comes to proper execution of their clickwrap agreements. Unfortunately, that is a common mistake among plenty of SaaS startups. Their login format remains unchanged, still relying on hyperlinks and “binding” people through small login flow print. Their confirmation button for becoming a user still says “play now” indicating that this is a game, rather than a virtual league where money can certainly be at stake.

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But you better believe that their Terms of Use still scream in all caps at the beginning of the agreement that Section 15 entails a waiver of class action rights and is subject to binding arbitration. They were not shy about that reminder!

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Here at PactSafe, we love friendly competition, tailgating, and enjoying sports more than your average group. Still, it’s difficult to completely back either of these fantasy sports organizations when neither of their execution of online agreements is completely sound. This is a perfect example of how both drafting online terms, and having them executed properly are equally important. Learn about more ways to not execute clickwraps here. We wouldn’t want federal court pass interference to cost you the game. 

Amber Ferrari

Written by Amber Ferrari