A California sports betting lawsuit against Fliff, the “social sportsbook” operating in states without legal sports betting, will be settled by arbitration, a district court judge ruled on January 5.
Fliff player Bishoy Nessim is seeking $7 million in a class action lawsuit accusing the company of illegally operating California sports betting.
Judge Sunshine S. Sykes of the Central District of California agreed with Fliff that players waive the right to settle disputes in court when they agree to the company’s terms and conditions. The case now moves to third-party arbitration. This alternative dispute resolution relies on a neutral arbitrator to preside over a private process where both parties present their arguments and evidence.
This prevents “hundreds if not thousands” from joining in on a class action, according to Nessim’s lawyers. Sykes rejected Nessim’s argument that a prior California ruling established a precedent for relief.
Nessim presented a quote from a California Supreme Court decision in Armendariz v. Found. Health Psychcare Servs., that stated an arbitration agreement may not limit statutorily imposed remedies such as punitive damages or attorney fees.
“After careful review of Armendariz, the Court finds Nessim and his counsel mischaracterize the above quote,” Sykes said. “The quote is not made in relation to a discussion of substantive unconscionability. Rather, it is made in analyzing whether an arbitration agreement’s limitation of remedies in Fair Employment and Housing Act actions specifically renders the arbitration agreement contrary to public policy and thus unlawful.”
Californians have rejected attempts to legalize sports betting via multiple ballot referendums. Home to the largest population in the US, the Golden State would quickly become one of the most important betting markets in the country.
Another attempt to legalize California sports betting is pending, though it faces staunch opposition from the state’s gaming tribes.
