Las Vegas-based Cantor Gaming could become a significant partner player in the emerging daily fantasy sports market without actually providing a daily fantasy sports product.
If Cantor Gaming can make a strong enough case for numerous patent infringements, it likely will get a piece of the action already being built by daily fantasy sports titans DraftKings and FanDuel.
Cantor Gaming says, in separate Nevada District Court complaints filed April 7 and 8, that DraftKings and FanDuel infringe on at least seven of their mobile gaming patents to provide their service
Cantor Gaming says it tried to make deals with DraftKings and FanDuel, but they refused, forcing Cantor Gaming to take them to federal court. With the complaints filed, motions for preliminary injunctions against the daily fantasy sports sites will follow within days. If the court grants preliminary injunctions, Cantor Gaming would have a powerful negotiation tool for forcing a quick settlement.
With DraftKings and FanDuel currently fighting to gain regulatory approval in several states including New York, FanDuel’s home state, and Nevada, where Cantor Gaming is based, the likelihood of a lengthy court battle is unlikely.
Should Cantor Gaming succeed in having the court order so much as a preliminary injunction, which only requires it demonstrate ongoing harm and a probability of prevailing on its claims, DraftKings and FanDuel would suffer significant setbacks at a time they can’t afford it. The preliminary injuction might not shut down their websites and web-based services, but it could cut them out of the lucrative mobile gaming market, barring a ruling in their favor, or a more likely settlement.
The likeliest scenario is they will settle with Cantor Gaming, pay licensing fees going forward, and possibly a settlement for prior use, without admitting fault. The federal complaints could discourage respective state gaming regulators from licensing DraftKings and FanDuel before the fall football season begins and they can’t risk it.
If Cantor Gaming secures settlements with DraftKings and FanDuel, the company would gain a significant interest in the success of the nation’s two leading daily fantasy sports providers. It also might force future daily fantasy sports firms to pay licensing fees to Cantor Gaming, which likewise could be lucrative, and make its patents extremely valuable.
