California does not have legal sports betting after voters struck down bills in 2023, but that has given rise to daily fantasy sports sites and what Fliff calls a “social sportsbook.”
While these offerings are popular because sports betting in California is illegal, they are not immune from lawsuits as Fliff has learned. A group of California lawyers seeks a class action lawsuit against Fliff Inc. on behalf of their client Bishoy Nessim, who claims he lost over $7,000 using Fliff’s mobile app. Nessim is seeking $7 million in damages for himself and others who lost money using the Fliff Sweepstakes sports wagering facsimile.
Fliff countered by claiming its terms and conditions state that any legal disputes are to be handled via third party arbitration; a claim that the lawyers of Nessim have said do not apply in California.
Fliff wants arbitration; Plaintiff lawyers want lawsuit
How this lawsuit is settled is the current fight being wagered.
Nessim and his team of lawyers want to settle the lawsuit in court, which would allow many others affected by Fliff to join the class action lawsuit. This would more than likely mean a bigger payout to those who feel wronged and would allow many more joining the class action.
Fliff hopes to settle the lawsuit through a third-party arbitrator and filed a motion to do so. This would lead to arbitration on an individual basis as opposed to a group effort class action lawsuit. Being that the arbitration process would have to be done individually, many who feel wronged could elect to give up on move on effectively saving Fliff money and giving them more power over the process.
According to Nessim’s team of lawyers, Fliff forcing its users to go the arbitration route is not allowed in California because that process would violate California’s Unfair Competition Law, passed to protect customers from giving away their right to seek help through the court system.
Nessim’s lawyers, who are led by San Diego local Dennis Stewart of Gustafson Gluek PLLC, provided their reaction to Fliff’s motion to move the lawsuit to a third party arbitrator.
“In sum, because Plaintiff alleges a cause of action under the UCL, and seeks highly important public injunctive relief vindicating the state’s fundamental policy against gambling, Fliff’s arbitration terms violate the McGill Rule.”
The court will hold a hearing about the motion to move the lawsuit to third-party arbitration on Sept. 29.
What are the next steps for Fliff and Nessim’s team of lawyers?
More will become clear after the courts hold a hearing in late September about the motion from Fliff to move the lawsuit to third-party arbitrators. So, for now, all involved are in a holding pattern.
That hearing will be heard by Judge Sunshine Sykes and it could have major implications for the future of California sports betting apps including free-to-play and sweepstake-style variants.
If Judge Sykes elects to move the case to a jury trial, expect months and months of court battles before a decision is made. There will be many motions and counter motions and both parties fight for leverage every step of the way.
If Judge Sykes sides with Fliff and pushes the lawsuit to arbitration, the case would effectively end, and the lawsuit will be dealt with on an individual basis. While quicker from start to finish, this would mean less leverage for those looking to join the class action lawsuit against Fliff.
