By: Andrew Cammarano
In 2018, the Supreme Court struck down the Professional and Amateur Sports Protection Act, eliminating the federal ban on sports gambling and allowing states to legalize sports gambling on their own accord. Now, over 30 states, including Washington D.C., have legalized sports betting and the emergence of online gambling has skyrocketed. Online sportsbooks use the GPS location of the user’s device to verify the jurisdiction of the user, allowing people who are in states that have legalized sports betting to place bets whenever they would like. This accessibility has allowed for companies like PrizePicks, an online fantasy gambling company, to explode— gaining over 300,000 new users and 8 million new bets placed in 2021 alone.
In 2022, the sports gambling industry brought in over $7.5 billion in revenue with companies like PrizePicks. Last year, PrizePicks paid out more than $130 million to their users. Although gambling can be an avenue for users to add a financial incentive to their fandom or try to win money on their favorite teams, the sportsbooks that are responsible for setting lines and making prop bets generally use patented technology to set their odds in favor of increased revenue. At the end of the day, the house always wins, and these sportsbooks are amid heated competition with other oddsmakers just like the teams their users are betting on.
In June of 2023, Vetnos, a sports gambling solutions provider, filed a lawsuit against Prizepicks alleging patent and trade secret infringement. Vetnos’s odds making technology is used by several sports books and casinos to set lines and over under totals. Companies that partner with Vetnos and use their technology can eliminate the time and financial burden that accompanies technological development should sports books set their own lines from scratch. Using trusted technology, like Vetnos’s, allows for more accurate lines to be set for users only increasing the “houses” money. The complaint alleges that, following multiple unsuccessful attempts between the two companies to form a partnership that would allow Prizepicks to use Vetnos’s technology, Prizepicks copied Vetnos’s patented technology. With the aid of a former Vetnos employee, Prizepicks appropriated patent protected liability limiting technology. Centered around four U.S. patent’s, U.S. Patent No. 10,353,543, U.S. Patent No. 10,353,543, U.S. Patent No. 11,157,147, U.S. Patent No. 11,579,754, Prizepicks has been able to better understand the risk associated with the daily fantasy games without development of the technology or delayed financial reward traditionally associated with the trial-and-error process of creating and implementing new technology. The allegedly infringed patents have also allowed Prizepicks to set lines that drastically decrease their financial risk associated with the prop style bets they offer. Unlike the major markets, prop bets do not account for factors such as weather or injuries when making odds, decreasing the efficiency these style bets have for the sportsbook’s revenue. This inefficiency can be exploited by timely and attentive betters, allowing users to gain significant advantage over sportsbooks.
If Vetnos is unsuccessful in their efforts to retain their intellectual property rights and Prizepicks continues to infringe upon Ventos’ technology, the world of online sports gambling could substantially shift to an even more competitive market for both consumers and sportsbooks alike. This heightened competition is particularly harmful, given the development and implementation of such technology, which allows sportsbooks to cover all areas of sports gambling, is financially inefficient. The current online market provides space for sportsbooks to target unique corners of the market by offering specialized bets, just like Prizepicks does with daily fantasy prop bets. This differentiation between sportsbooks also provides betters with the ability to “odds shop” between sportsbooks to find which book has the best odds for their desired bet. Many betters have online accounts at multiple books for this reason.
Success for Prizepicks has the potential to eliminate some of the distinction between sportsbooks, creating not only uniformity and decreased odds for consumers, but also a significantly harder marketplace for sportsbooks. Increasing the accessibility of sportsbooks to obtain and use technology from competitors would likely even the playing field between companies and while also forcing their hand in driving down the odds to attract betters.
Student Bio: Andrew Cammarano is a second-year law student at Suffolk University Law School. He is a staff writer on the Journal of High Technology Law and is the President of the Christian Legal Society. Andrew received a Bachelor of Arts in Economics from Wheaton College IL.
Disclaimer: The views expressed in this blog are the views of the author alone and do not represent the views of JHTL or Suffolk University Law School.
