Baltimore's DraftKings Lawsuit Returned to State Court

Baltimore's legal battle against the online sports betting giants DraftKings and FanDuel has been sent back to state court by a federal judge, a move that could favor the city in its claims.

On November 10, U.S. District Judge Stephanie Gallagher ruled to remand the case to the Baltimore City Circuit Court, where the lawsuit was originally filed in April. The city contends that the two companies engage in practices that target and exploit individuals with gambling problems, violating local consumer protection laws.

The lawsuit seeks civil penalties and injunctive relief rather than monetary damages. After the city initiated the lawsuit, DraftKings and FanDuel sought to have the case moved to federal court, but the city requested it be returned to state jurisdiction.

In her ruling, Judge Gallagher emphasized that Maryland's state courts are better suited to handle the intricate state law issues involved in the case. She noted that it was not the federal court's role to interpret how local consumer protection laws align with state regulations governing online gambling.

Gallagher's decision indicates that allowing the federal court to define terms like 'unfair' and 'deceptive' in the context of online gambling could undermine the authority of state courts to address these matters first.

Despite the remand to state court, the legal proceedings are far from over. The sportsbooks have appealed Gallagher's ruling to the U.S. Court of Appeals for the Fourth Circuit, delaying any substantive litigation regarding the city's claims until the appeal is resolved.

Representatives from DraftKings and FanDuel, as well as Baltimore Mayor Brandon Scott, have chosen not to comment on the ongoing litigation. The city is being represented by legal counsel from DiCello Levitt in conjunction with its law department, while the sportsbooks are defended by a team of attorneys from Covington & Burling, Baker Donelson, and Coblentz Patch Duffy & Bass.

This case is part of a broader landscape of sports betting litigation in Maryland, which includes ongoing disputes involving other entities like Kalshi, a prediction market that has challenged the state's regulatory authority.

Reported by HarborBeat based on Maryland Daily Record (source).