What changed in this filing

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Item 1. Legal Proceedings

2024-11-08 compared with 2024-08-02 · 66 added, 47 removed, 349 unchanged (24% of the section changed)

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On July 2, 2024, DraftKings filed its reply in support of its motion for attorneys’ fees.

On October 29, 2024, the court denied DraftKings’ motion for attorney’s fees.

On July 7, 2021, Winview Inc., a Delaware corporation (“Winview”) filed suit against the Company in the U.S.

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and Crown Gaming Inc., a Delaware corporation, which are wholly-owned subsidiaries of the Company.

SAC, among other allegations, repeats the allegations of the first amended complaint that the defendants infringe the ’243 Patent, the ’543 Patent, the ’730 Patent, and the ’988 Patent.

The SAC, among other allegations, repeats the allegations of the first amended complaint that the defendants infringe the ’243 Patent, the ’543 Patent, the ’730 Patent, and the ’988 Patent.

On December 15, 2021, the Company filed its motion to dismiss the SAC, again arguing that Winview failed to state a claim for direct infringement of the ’543 Patent and the ’730 Patent, and for willful, induced, and contributory infringement for all four asserted patents.

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On June 28, 2024, the United States Court of Appeals for the Federal Circuit ordered WinView’s appeal dismissed.

On September 10, 2024, WinView filed a letter with the district court seeking a 60-day continuance to transition new counsel for WinView into the matter.

On September 11, 2024, the court granted the request and ordered the parties to submit a joint status report on November 12, 2024.

We intend to vigorously defend this case.

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Beginning on July 9, 2021, the Company received subpoenas from the SEC seeking documents concerning, among other things, allegations concerning SBTech that were contained in a report published about the Company on June 15, 2021 by Hindenburg Research, as well as the Company’s adherence to and disclosures regarding its compliance policies and procedures, and related matters.

The Company intends to comply with the related requests and is cooperating with the SEC’s ongoing inquiry.

We cannot predict with any degree of certainty the outcome of the SEC matter or determine the extent of any potential liabilities.

We also cannot provide an estimate of the possible loss or range of loss.

Any adverse outcome in the SEC matter could expose the Company to substantial damages or penalties that may have a material adverse impact on the Company’s operations and cash flows.

Despite the potential for significant damages, we do not believe, based on currently available information, that the outcome of the SEC matter will have a material adverse effect on our financial condition, although the outcome could be material to our operating results for any particular period, depending, in part, upon the operating results for such period.

In September 2024, the Company entered into a settlement with the SEC regarding alleged violations of Regulation FD in connection with the disclosure on July 27, 2023 of certain information concerning DraftKings’ business through certain social media platforms.

Without admitting or denying the substantive allegations, DraftKings agreed to the entry of a cease and desist order and the payment of a $200,000 penalty.

Following the settlement, the Company considers that all the above SEC matters have concluded.

Matters Related to the GNOG Transaction

On August 12, 2022, a putative class action was filed in Nevada state District Court in Clark County against Golden Nugget Online Gaming, Inc.

(“GNOG Inc.”), the Company and one of its officers and two affiliates, as well as former officers

or directors and the former controlling stockholder of GNOG Inc.

(“GNOG Inc.”), the Company and one of its officers and two affiliates, as well as former officers or directors and the former controlling stockholder of GNOG Inc.

and Jefferies LLC.

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On January 18, 2024, the court entered a stipulated order extending the stay until resolution of the parallel proceedings in Delaware Chancery Court.

On August 30, 2024, DraftKings filed a motion for summary judgment.

On September 15, 2024, the court entered a stipulated order dismissing the action with prejudice.

On September 9, 2022, two similar putative class actions were filed in the Delaware Court of Chancery against former directors of GNOG Inc.

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At a mediation held on January 24, 2024, the parties reached an agreement in principle to settle the Delaware action, which was reflected in a written settlement agreement, dated March 1, 2024.

On July 9, 2024, the court entered its Order and Final Judgment approving the settlement and dismissing the action.

The deadline to appeal is August 8, 2024.

If no appeal is filed on or before that date, the Order and Final Judgment dismissing the action becomes final.

The Company intends to vigorously defend against the Nevada action.

The Company cannot predict with any degree of certainty the outcome the Nevada action or determine the extent of any potential liabilities.

The Company also cannot provide an estimate of the possible loss or range of loss of the Nevada action.

Any adverse outcome in the Nevada action could expose the Company to substantial damages or penalties that may have a material adverse impact on the Company’s operations and cash flows.

Despite the potential for significant damages, the Company does not believe, based on currently available information, that the outcome of the Nevada action will have a material adverse effect on the Company's financial condition, although the outcome could be material to the Company's operating results for any particular period, depending, in part, upon the operating results for such period.

On July 9, 2024, the court entered its Order and Final Judgment approving the settlement and dismissing the action with prejudice.

The Order and Final Judgment is now final as no appeal was filed by the August 8, 2024 deadline.

AG 18, LLC d/b/a/ Arrow Gaming

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On March 7, 2022, the Company filed a motion to disqualify plaintiff’s counsel.

On March 21, 2022, plaintiff filed its opposition to the Company's motion to disqualify plaintiff’s counsel, and on March 28, 2022, the Company filed its reply thereto.

On March 21, 2022, plaintiff filed its opposition to the Company’s motion to disqualify plaintiff’s counsel, and on March 28, 2022, the

Company filed its reply thereto.

On September 21, 2022, the Company’s motion to dismiss was administratively terminated, pending the outcome of the disqualification motion.

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On April 7, 2022, Plaintiff filed its opposition to the Company’s motion to dismiss, and on April 25, 2022, the Company filed its reply thereto.

On September 7,

2022, the Company's motion to dismiss the complaint was granted.

On September 7, 2022, the Company’s motion to dismiss the complaint was granted.

On September 22, 2022, Beteiro filed its notice to appeal the ruling on the motion to dismiss.

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On July 8, 2024, DraftKings appealed the PTAB’s findings.

On July 25, 2024, Beteiro and DraftKings filed stipulated dismissals of those appeals, wherein Beteiro stipulated that:

On July 25, 2024, Beteiro and DraftKings filed stipulated dismissals of those

appeals, wherein Beteiro stipulated that:

(1) it would not seek to further appeal the Federal Circuit’s June 21, 2024 affirmance of the dismissal of Beteiro’s complaint in the district court;

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Magistrate Judge Burke held a hearing on Colossus’ motion on June 6, 2023 and subsequently issued a report and recommendation (the “Second Report and Recommendation”) that the motion be denied in part and granted in part.

Colossus filed objections to the Second Report and Recommendation on June 21, 2023, and DraftKings filed its response to

Colossus’ objections on July 5, 2023.

Colossus filed objections to the Second Report and Recommendation on June 21, 2023, and DraftKings filed its response to Colossus’ objections on July 5, 2023.

On August 2, 2023, Judge Noreika overruled Colossus’ objections and adopted the Second Report and Recommendation.

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On February 21, 2024, the DRP issued a decision vacating the PTAB’s denial of institution of the IPR directed to the ’779 Patent and instructing the PTAB to reconsider institution.

On May 15, 2024, the PTAB instituted the IPR directed to the ‘779 Patent.

On May 15, 2024, the PTAB instituted the

IPR directed to the ‘779 Patent.

Colossus filed its Patent Owner Response on August 9, 2024.

The Company’s reply is due on November 8, 2024.

Colossus’ sur-reply is due on December 20, 2024.

Oral argument is schedule for February 20, 2025.

On March 15, 2024, the parties entered into a partial settlement agreement, in which the parties agreed to, among other things:

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Any adverse outcome in these matters could expose the Company to substantial damages or penalties that may have a material adverse impact on the Company’s operations and cash flows.

material to the Company’s operating results for any particular period, depending, in part, upon the operating results for such period.

Despite the potential for significant damages, the Company does not believe, based on currently available information, that the outcome of this matter will have a material adverse effect on Company’s financial condition, although the outcome could be material to the Company’s operating results for any particular period, depending, in part, upon the operating results for such period.

On January 9, 2023, Simpson G.

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We intend to comply with these requests.

Any adverse outcome in these matters could subject the Company to substantial damages and/or require alterations to the Company’s business.

The Company cannot provide any assurance as to the outcome of these matters.

The Company cannot predict with any degree of certainty the outcome of these matters or determine the extent of any potential liability or damages.

Any adverse outcome in the subpoena matters could subject the Company to substantial damages and/or require alterations to the Company’s business.

The Company cannot provide any assurance as to the outcome of the subpoena matters.

The Company cannot predict with any degree of certainty the outcome of the subpoena matters or determine the extent of any potential liability or damages.

The Company also cannot provide an estimate of the possible loss or range of loss.

Any adverse outcome in these matters could expose the Company to substantial damages, penalties and/or require alterations to the Company’s that may have a material adverse impact on the Company’s operations and cash flows.

Despite the potential for significant damages, the Company does not believe, based on currently available information, that the outcome of these matters will have a material adverse effect on Company’s financial condition, although the outcome could be material to the Company’s operating results for any particular period, depending, in part, upon the operating results for such period.

Any adverse outcome in the subpoena matters could expose the Company to substantial damages, penalties and/or require alterations to the Company’s that may have a material adverse impact on the Company’s operations and cash flows.

Despite the potential for significant damages, the Company does not believe, based on currently available information, that the outcome of the subpoena matters will have a material adverse effect on Company’s financial condition, although the outcome could be material to the Company’s operating results for any particular period, depending, in part, upon the operating results for such period.

Shareholder Derivative Litigation Related to DraftKings Marketplace

On May 31, 2023, a putative shareholder derivative action was filed in Nevada state court by an alleged shareholder of the Company.

The action asserts claims on behalf of the Company against certain senior officers and members of the Board of

Directors of the Company for breach of fiduciary duty and unjust enrichment based primarily on allegations that the defendants caused or allowed the Company to disseminate misleading and inaccurate information to its shareholders in connection with NFTs that are sold and traded on the DK Marketplace.

The action also alleges that certain individuals are liable for trading in Company stock at artificially inflated prices.

The action seeks unspecified compensatory damages, changes to corporate governance and internal procedures, restitution, disgorgement, costs and attorney’s fees, and other unspecified relief.

All proceedings in this action were stayed by agreement of the parties pending resolution of the above-referenced motion to dismiss in the putative class action in Massachusetts federal district court.

In light of the federal district court’s above-referenced denial of the motion to dismiss in the putative class action in Massachusetts, the stay of proceedings in this action in Nevada state court was lifted on August 1, 2024.

On May 31, 2023, the first of three substantially similar, putative shareholder derivative actions was filed in Nevada state court by an alleged shareholder of the Company.

The actions purport to assert claims on behalf of the Company against certain senior officers and members of the Board of Directors of the Company for breach of fiduciary duty, aiding-and-abetting breach of fiduciary duty, unjust enrichment, and corporate waste based primarily on allegations that the defendants caused or allowed the Company to sell NFTs in violation of applicable law and/or operate the Company as an unregistered broker-dealer or securities exchange in violation of applicable law.

Two of the actions also assert that certain of the defendants are liable for causing or allowing the Company to disseminate misleading and inaccurate information to its shareholders in connection with NFTs that are sold and traded on the DK Marketplace.

One of the actions also alleges that certain individuals are liable for trading in Company stock at artificially inflated prices.

The actions seek unspecified compensatory damages, changes to corporate governance and internal procedures, restitution, disgorgement, costs and attorney’s fees, and other unspecified relief.

On October 29, 2024, the court entered a stipulated order consolidating the three actions under the caption In re DraftKings Inc.

Stockholder Derivative Litigation and appointed lead counsel and further ordered that plaintiffs shall file a consolidated amended complaint within sixty days.

The Company cannot predict with any degree of certainty the outcome of this matter or determine the extent of any potential liabilities.

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The court held oral argument on July 25, 2024.

On August 19, 2024, the court denied the motion to dismiss.

The Company intends to vigorously defend this case.

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The plaintiffs are seeking, among other things, injunctive relief, actual damages, punitive damages, treble damages, and attorneys’ fees.

By agreement of the parties, DraftKings’ response to the Complaint is due on August 12, 2024.

The Company intends to vigorously defend this case.

Any adverse outcome in this matter could subject the Company to substantial damages and /or require alterations to the Company’s business.

The Company cannot provide any assurance as to the outcome of this matter.

The Company cannot predict with any degree of certainty the outcome of the suit or determine the extent of any potential liability or damages.

The Company also cannot provide an estimate of the possible loss or range of loss.

Any adverse outcome in this matter could expose the Company to substantial damages or penalties that may have a material adverse impact on the Company’s operations and cash flows.

On August 9, 2024 plaintiff voluntarily dismissed the lawsuit with prejudice as to plaintiff’s individual claims.

On June 10, 2024, Plaintiff Matthew McAfee, individually and on behalf of all others similarly situated, filed a purported class action lawsuit against DraftKings in the Hamilton County Superior Court, State of Indiana.

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Plaintiff seeks, among other things, actual and statutory damages, treble and exemplary damages, interest, and attorney fees and costs.

On July 12, 2024, DraftKings removed the matter to federal court in Indiana.

Per agreement of the parties and the Court’s order, DraftKings’ response to the complaint is due on August 7, 2024.

On July 12, 2024, DraftKings removed the matter to the United States District Court for the Southern District of Indiana.

On August 14, 2024, DraftKings filed a motion to dismiss;

on September 18, 2024, Plaintiff filed his opposition;

on October 7, 2024, DraftKings filed its reply;

and on October 14, 2024, Plaintiff filed a motion for leave to file a surreply, which DraftKings has opposed.

The Company intends to vigorously defend this case.

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On September 30, 2024, plaintiff Nerye Aminov, individually and on behalf of others similarly situated, filed a purported class action lawsuit against DraftKings in the Supreme Court of the State of New York, County of Queens.

Among other things, Plaintiff alleges that the Company’s promotion that offered new customers an opportunity to earn up to 1,000 in site credits, and related advertisements were unfair or deceptive practices in violation of New York General Business Law §§ 349-350.Plaintiff also asserts claims for intentional misrepresentation, fraudulent inducement, and quasi-contract/unjust enrichment.

Plaintiff seeks, among other things, injunctive relief, actual damages, punitive damages, and attorneys’ fees.

Plaintiff seeks to certify a nationwide class, with a New York subclass.

The complaint has not yet been served.

The Company intends to vigorously defend this case.

Any adverse outcome in this matter could subject the Company to substantial damages and/or require alterations to the Company’s business.

The Company cannot provide any assurance as to the outcome of this matter.

The Company cannot predict with any degree of certainty the outcome of the suit or determine the extent of any potential liability or damages.

The Company also cannot provide an estimate of the possible loss or range of loss.

Any adverse outcome in this matter could expose the Company to substantial damages or penalties that may have a material adverse impact on the Company’s operations and cash flows.

National Football League Players Association

On August 20, 2024, the plaintiffs, National Football League Players Association and National Football League Players Incorporated, filed a complaint against DraftKings in the United States District Court for the Southern District of New York alleging, among other things, that DraftKings breached its Licensing Agreement (the “Agreement”) with the plaintiffs.

The plaintiffs are seeking, among other things, payment of all purported unpaid sums due under the Agreement.

The Company intends to vigorously defend this case.

Any adverse outcome in this matter could subject the Company to substantial damages and/or require alterations to the Company’s business.

The Company cannot provide any assurance as to the outcome of this matter.

The Company cannot predict with any degree of certainty the outcome of the suit or determine the extent of any potential liability or damages.

The Company also cannot provide an estimate of the possible loss or range of loss.

Any adverse outcome in this matter could expose the Company to substantial damages or penalties that may have a material adverse impact on the Company’s operations and cash flows.

In addition to the above actions, we are subject to various other legal proceedings and claims that arise in the ordinary course of business.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Legal Proceedings