CASE 0:20-cv-00602-ECT-TNL Document 1 Filed 02/26/20 Page 1 of 38
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF MINNESOTA
`
`
`CODY LUCAS, individually and on
`behalf of other similarly situated
`individuals,
`
`
`Plaintiff,
`
`
`
`
`Civil Action No.
`
`
`CLASS ACTION COMPLAINT
`
`JURY TRIAL DEMAND
`
`
`
`
`v.
`
`
`SPORTRADAR, US; MAJOR LEAGUE
`BASEBALL; MLB ADVANCED
`MEDIA, LP; HOUSTON ASTROS, LLC;
`and BOSTON RED SOX BASEBALL
`CLUB, LP,
`
`
`Defendants.
`
`
`
`
`
`
`
`
`CLASS ACTION COMPLAINT
`
`Plaintiff, Cody Lucas, brings this Class Action Complaint against Defendants,
`
`Major League Baseball (“MLB”) and MLB Advances Media, LP (“MLBAM”)
`
`(collectively, the “MLB Defendants”), Sportradar, US (“Sportradar”), Houston Astros,
`
`LLC (the “Astros”), and Boston Red Sox Baseball Club, LP (the “Red Sox”), to recover
`
`damages for Defendants’ unlawful manipulation of baseball players’ performance statistics
`
`and to seek redress for all those who have been harmed by Defendants’ misconduct.
`
`Plaintiff alleges as follows based on personal knowledge as to himself and his own acts
`
`and experiences, and as to all other matters, on information and belief, including an
`
`investigation by his attorneys.
`
`547210.1
`
`

`

`CASE 0:20-cv-00602-ECT-TNL Document 1 Filed 02/26/20 Page 2 of 38
`
`
`
`NATURE OF THE CASE
`
`1.
`
`Historically, the MLB has taken a firm stance against gambling in
`
`professional baseball. However, the MLB’s position on gambling started to change once
`
`they realized that it could be profitable for them. In 2015, the MLB started to invest in
`
`Daily Fantasy Sports (“DFS”) fantasy baseball and promote its fans’ participation in DFS
`
`wagering.
`
`2.
`
`Through fans’ participation in DFS wagering, the MLB gains a quantifiable
`
`benefit financially, not only through the sharing of contest fees with the DFS platform, but
`
`also through larger attendance at games, increased revenue through advertising, and
`
`general interest associated with the sport as a whole.
`
`3.
`
`Accordingly, the MLB substantially rooted itself in the DFS world by
`
`forming a partnership with one of the main daily fantasy platforms in the industry.1 This
`
`partnership provided, and still provides to date, that MLB Defendants will actively promote
`
`DFS baseball competitions, grant promotional advertising rights, include the use of MLB
`
`league and team logos, and afford rights and sponsorship opportunities to MLB constituent
`
`teams.2
`
`
`1 Press Release, DraftKings Becomes the Official Daily Fantasy Game of Major League Baseball,
`BUSINESS WIRE (Apr. 2, 2015), https://www.businesswire.com/news/home/20150402006154
`/eb/DraftKings-Official-Daily-Fantasy-Game-Major-League (accessed Feb. 6, 2020).
`2 See Dustin Gouker, Play Ball: DraftKings Announces Deal with 27 Major League Baseball
`(July 31, 2015), https://www.legalsportsreport.com
`Teams, LEGAL SPORTS REPORT
`/2827/draftkings-mlb-team-deals/ (accessed Feb. 6, 2020)
`
`547210.1
`
`2
`
`

`

`CASE 0:20-cv-00602-ECT-TNL Document 1 Filed 02/26/20 Page 3 of 38
`
`
`
`4.
`
`Recently, the MLB Defendants’ have expanded their partnership to include
`
`other gambling platforms, including DFS company FanDuel Inc. (“FanDuel”).3 This
`
`partnership added FanDuel as one of the MLB’s “authorized gaming operators,” granting
`
`access to use MLB official team and league logos, opportunities for sponsorship deals,
`
`promotions with MLB member team constituents, and most importantly, access to MLB’s
`
`official data feed to be used within its gambling platform.4 Additionally, MLB Defendants
`
`announced their partnership with Sportradar, a global leader in sports data intelligence, to
`
`have the exclusive rights to the distribution of MLB’s real time game statistics.5 Per its
`
`partnership agreement, these real time game statistics are collected at every ballpark and
`
`distributed to both media companies and sports betting operators such as FanDuel.
`
`Sportradar’s duties in relation to these statistics includes the installation of integrity
`
`protection measures where it will use its “Integrity Services” to “monitor and analyze every
`
`MLB game via its award-winning fraud detection system and providing the MLB with
`
`educational components, as well as access to its intelligence and investigations services.”6
`
`5.
`
`In DFS competitions, such as those that FanDuel provides, participants pay
`
`entry fees to reserve their spot in contests, equivalent to placing bets and gambling. The
`
`
`3 FanDuel Group and Major League Baseball Announce Sports Betting Partnership, FANDUEL
`(Aug. 15, 2019) https://newsroom.fanduel.com/2019/08/21/fanduel-group-and-major-league-
`baseball-announce-sports-betting-partnership/ (accessed Feb. 6, 2020)
`4 Bill King, MLB Adds Fanduel To Portfolio of Sports Betting Providers, SPORTS BUSINESS DAILY,
`(Aug. 15, 2019) https://www.sportsbusinessdaily.com/Daily/Issues/2019/08/15/Marketing-and-
`Sponsorship/FanDuel.aspx (accessed Feb. 6, 2020)
`5 Major League Baseball and Sportradar Announce Official Exclusive Global Partnership,
`SPORTRADAR (February 27, 2019), https://sportradar.us/2019/02/major-league-baseball-and-
`sportradar-announce-official-exclusive-global-partnership/ (accessed Feb. 13, 2020)
`6 Id.
`
`547210.1
`
`3
`
`

`

`CASE 0:20-cv-00602-ECT-TNL Document 1 Filed 02/26/20 Page 4 of 38
`
`
`
`participants then assemble virtual teams of real MLB players which “compete” against
`
`other participants’ teams in these contests. The winners of each contest are based on the
`
`statistical performance of the assembled players that the participants have selected. The
`
`statistics used to score the competitions are the official MLB statistics, monitored and
`
`distributed by Sportradar, that FanDuel has been granted access to use based on its
`
`partnership with the MLB Defendants.
`
`6.
`
`Competitors “draft” players onto their team to fill a roster of players which
`
`must remain under a set salary cap. Each individual player has an assigned salary that when
`
`drafted will be attributed to the participant’s team’s salary cap. The individual player’s
`
`salary is largely determined on their projected performance for that day’s real-life MLB
`
`game.
`
`7.
`
`Entry fees to these competitions range from anywhere between less than
`
`$1.00 up to almost $11,000, many times including hundreds of thousands of competitors.
`
`There are many different types of competitions and a participant can win head-to-head
`
`matchups against other participants, or against hundreds of thousands of participants in a
`
`“tournament” style pool.
`
`8.
`
`These DFS leagues have grown wildly popular and are now part of a multi-
`
`million-dollar industry that the MLB Defendants are direct participants and beneficiaries
`
`of.
`
`9.
`
`The MLB is composed of 30 teams, 29 in the United States and 1 in Canada,
`
`representing the highest level of professional baseball. By partnering with FanDuel, the
`
`547210.1
`
`4
`
`

`

`CASE 0:20-cv-00602-ECT-TNL Document 1 Filed 02/26/20 Page 5 of 38
`
`
`
`MLB and its constituent teams, including Defendants Astros and Red Sox, have been
`
`complicit in persuading fans to participate in FanDuel’s DFS wagering competitions.
`
`10. By embracing DFS wagering platforms, the MLB has popularized fantasy
`
`games and encouraged fans to make wagers by paying entry fees for competitions to take
`
`a financial stake in their league’s games. FanDuel, the MLB, and MLB’s affiliate teams,
`
`including the Astros and Red Sox, derive enormous financial benefit from fans’
`
`participation in these fantasy games.
`
`11.
`
`Fans entering these wagering competitions, as advertised by the MLB, relied
`
`on the league being an advocate for the enforcement of its Official Rules and regulations.
`
`Specifically, participants relied on the integrity and fairness of statistics, monitored and
`
`distributed by Sportradar, that are used to score and determine the winners of DFS
`
`competitions. As related to this lawsuit, the MLB’s Official Rules and other regulations
`
`expressly prohibit the use of any electronic devices to decode or attempt to decode sign
`
`between pitcher and catcher, also known as “pitch stealing.”
`
`12.
`
`In November 2019, Ken Rosenthal and Evan Drellich reported, via The
`
`Athletic, a scandal within Major League Baseball, describing a scheme by the Astros using
`
`electronic devices to steal signs from their opponent and relay them to their players on the
`
`field.7 This conduct occurred during the 2017 season, one in which the Astros won the
`
`World Series.
`
`
`7 Ken Rosenthal and Evan Drellich, The Astros Stole Signs Electronically in 2017 – Part of a Much
`for Major League Baseball, THE ATHLETIC,
`(Nov. 12, 2019),
`Broader
`Issue
`https://theathletic.com/1363451/2019/11/12/the-astros-stole-signs-electronically-in-2017-part-of-
`a-much-broader-issue-for-major-league-baseball/ (accessed Feb. 7, 2020).
`
`547210.1
`
`5
`
`

`

`CASE 0:20-cv-00602-ECT-TNL Document 1 Filed 02/26/20 Page 6 of 38
`
`
`
`13.
`
`Following the public revelation of the Astros’ conduct, The Athletic reported
`
`a that the Red Sox had also used similar electronic devices to steal signs from their
`
`opponent during the 2018 MLB season, a season in which the Red Sox won the World
`
`Series.
`
`14.
`
`In January 2020, the MLB released its own report on the results of its
`
`investigation into the Astros’ sign stealing scandal. The report found the Astros culpable
`
`for violating the MLB Official Rules and regulations and fined the organization $5 million.
`
`15.
`
`In light of the MLB’s findings, the Astros’ front office fired general manager
`
`Jeff Luhnow and manager A.J. Hinch. Other managers named in the scandal, Red Sox
`
`manager Alex Cora and Mets manager Carlos Beltran, were fired from their respective
`
`positions within their organizations.
`
`16.
`
`The manipulative and deceitful conduct of at least two of MLB’s most
`
`successful teams and their employees has, at the very least, profoundly affected baseball
`
`since early 2017, and continues to do so through the 2019 postseason. The effects of this
`
`scandal substantially impacted the outcome of thousands, if not hundreds of thousands, of
`
`DFS wagering competitions and participants.
`
`17. While actively inducing their fans to enter into DFS wagering competitions
`
`based on Official MLB Sportradar statistics, MLB member teams were engaged in
`
`misconduct in violation of MLB’s Official Rules and Regulations. The MLB’s lack of
`
`oversight and its constituent member teams’ cheating destroyed the fairness of DFS
`
`wagering competitions.
`
`547210.1
`
`6
`
`

`

`CASE 0:20-cv-00602-ECT-TNL Document 1 Filed 02/26/20 Page 7 of 38
`
`
`
`18.
`
`The fans who engaged in fantasy wagering, that were largely encouraged by
`
`the MLB, were unaware that the MLB had been ignoring the fraudulent conduct of its
`
`constituent teams. Further, participants were unaware that the MLB had failed to uphold
`
`its commitment to preserving the honesty and integrity of its baseball games. Specifically,
`
`participants of FanDuel wagering were unaware that MLB had failed to enforce its rule
`
`prohibiting the use of electronic devices to steal signs and relay them to players on the
`
`field, skewing the outcomes of DFS competitions.
`
`19.
`
`FanDuel is authorized to use MLB Defendants’ official statistics. But the
`
`MLB’s misconduct and cheating by its constituent teams distorted player’s statistics,
`
`impacting the outcomes of MLB games and thus altering the outcomes of fantasy baseball
`
`competitions. Accordingly, by luring fans to participate in DFS competitions, where its
`
`constituent teams were engaging in corrupt and fraudulent conduct, the MLB undermined
`
`the fairness of and integrity of DFS participants’ wagers.
`
`20. MLB ignored the fraudulent conduct of its constituent teams and failed to
`
`investigate, prevent, enforce, or—importantly for DFS participants—disclose the wrongful
`
`activity. Even according to its own investigations, teams’ cheating had been occurring in
`
`MLB since, at the very least, early 2017, but it was not disclosed to the public until very
`
`recently.
`
`21.
`
`Plaintiff Cody Lucas, along with millions of other similarly situated MLB
`
`fans who participated in DFS wagering competitions, have been harmed due to Defendants’
`
`fraudulent and deceitful conduct. Plaintiff and other contestants placed wagers in DFS
`
`competitions under the belief that players’ statistics provided by Sportradar were derived
`
`547210.1
`
`7
`
`

`

`CASE 0:20-cv-00602-ECT-TNL Document 1 Filed 02/26/20 Page 8 of 38
`
`
`
`in accordance with MLB Official Rules and regulations. Plaintiff and contestants were
`
`unaware that the outcomes of DFS competitions were skewed by MLB and its constituent
`
`member teams’ cheating scandal, which MLB concealed and/or willfully ignored. Plaintiff
`
`and other contestants would not have participated in FanDuel’s DFS wagering
`
`competitions and/or would have been unwilling to make certain wagers had they been
`
`aware that the fairness and integrity of players’ statistical measures were compromised.
`
`22. As a result, Plaintiff and other DFS participants have sustained monetary
`
`losses. On his own behalf and on behalf of a class of other DFS participants, Plaintiff seeks
`
`an award of damages to recover the amounts of fees and wagers lost in corrupt DFS
`
`baseball wager competitions. In addition, Plaintiff seeks statutory damages, equitable
`
`relief, attorney’s fees and costs, as well as pre-judgment interest and all other relief that is
`
`warranted by applicable law.
`
`JURISDICTION AND VENUE
`
`23.
`
`This Court has federal subject matter jurisdiction over this matter pursuant
`
`to the Class Action Fairness Act, 28 U.S.C. § 1332(d) et seq., because this case is a putative
`
`class action in which the matter in controversy exceeds the sum or value of $5,000,000,
`
`exclusive of interest and costs; there are greater than 100 putative class members; at least
`
`one putative class member is a citizen of a state other than Defendants’ states of citizenship;
`
`and none of the exceptions under subsection 1332(d) apply to the instant action.
`
`24. Venue is proper in this District pursuant to 28 U.S.C. §1391(b) because a
`
`substantial part of the events or omissions giving rise to the claims asserted herein occurred
`
`in the District, as Defendant Sportradar’s headquarters are in this District and the
`
`547210.1
`
`8
`
`

`

`CASE 0:20-cv-00602-ECT-TNL Document 1 Filed 02/26/20 Page 9 of 38
`
`
`
`compromised statistics used and relied on by Plaintiff and the other DFS participants were
`
`reviewed, analyzed, and distributed, within and from this District.
`
`PARTIES
`
`25.
`
`Plaintiff Cody Lucas is a resident of New York.
`
`26. Defendant Major League Baseball (“MLB”) is an unincorporated association
`
`whose members are thirty clubs. MLB’s headquarters are located at 1271 Avenue of the
`
`Americas, New York, New York.
`
`27. Defendant MLB Advanced Media, LP (“MLBAM”) is a limited partnership
`
`comprised of owners of MLB’s membership teams. Its principal place of business is
`
`located at 1271 Avenue of the Americas, New York, New York. Defendant is primarily
`
`responsible for marketing the MLB.
`
`28. Defendant Houston Astros, LLC (the “Astros”) is a Texas limited liability
`
`corporation that owns and operates the Houston Astros MLB team. The Astros conduct
`
`substantial business in this District individually and as a member of MLB.
`
`29. Defendant Boston Red Sex Baseball Club LP (the “Red Sox”) is a
`
`Massachusetts limited partnership that owns and operates the Boston Red Sox MLB team.
`
`The Red Sox conduct substantial business in this District individually and as a member of
`
`MLB.
`
`30. Defendant Sportradar, US (“Sportradar”) is a Minnesota company that
`
`collects, reviews, analyzes, and distributes statistics from MLB games, including games
`
`played by the Red Sox and the Astros, to DFS entities such as FanDuel, and the MLB itself.
`
`547210.1
`
`9
`
`

`

`CASE 0:20-cv-00602-ECT-TNL Document 1 Filed 02/26/20 Page 10 of 38
`
`
`
`COMMON FACTUAL ALLEGATIONS
`
`I.
`
`Fantasy Baseball and Daily Fantasy Sports
`
`31.
`
`Fantasy Baseball is a statistical based competition where participants draft
`
`their respective “fantasy team” consisting of MLB players to compete against the fantasy
`
`teams of other participants.
`
`32.
`
`The real-life statistics of the MLB players that participants have selected for
`
`their fantasy team indicate their performance. Statistics are translated into points for
`
`competitive scoring purposes and points are awarded to teams when one of their fantasy
`
`players records a performance statistic. For example, when a player hits a homerun,
`
`whoever drafted that player into their fantasy team lineup is awarded points for his player’s
`
`homerun. All of the scoring in fantasy baseball is objectively measurable, and the
`
`participant whose fantasy team has been awarded the most points wins the competition.
`
`33.
`
`Fantasy sports competitions, such as fantasy baseball, are defined as a “game
`
`of skill,” which grants them an exemption from federal prohibitions on illegal gambling.
`
`34.
`
`In Daily Fantasy Sports, or DFS, participants compete in daily competitions
`
`where they draft a fantasy team of MLB players for that specific competition, rather than
`
`keeping those players over the course of an entire season. A participant could select a
`
`different player per lineup they enter, and even enter multiple lineups into one competition
`
`depending on its structure.
`
`35. DFS participants’ decisions about how to build their fantasy teams are
`
`entirely based on MLB players’ real world performance and statistics.
`
`547210.1
`
`10
`
`

`

`CASE 0:20-cv-00602-ECT-TNL Document 1 Filed 02/26/20 Page 11 of 38
`
`
`
`36.
`
`For instance, DFS participants must structure their fantasy lineup to stay
`
`under a given salary cap. Each real-life MLB player is assigned a salary which is largely
`
`conditioned on how well the player is expected to perform on that day. Better players have
`
`a higher salary than others.
`
`37.
`
`Further, the scoring of points in DFS is tied directly to the real-life
`
`performance of MLB players and the statistics that are used are all objectively measurable.
`
`These statistics and points are the primary determinant of whether or not a participant in a
`
`DFS wager competition wins or loses money.
`
`38.
`
`In order to enter into a DFS wager competition, the participant must pay an
`
`entry fee similar to placing a bet and have a viable lineup that is under the salary cap. The
`
`entry fee is good for one lineup. Entry fees can range between less than $1 to over $10,000,
`
`and contestants can enter competitions that allow the entry of thousands of lineups.
`
`39. A portion of the entry fee (about 4.5%) is kept by the DFS platform, such as
`
`FanDuel, as a payment for its services, and the remainder is used to fund the competition.
`
`For example, in head-to-head matchups, each contestant could wager $270 and then be
`
`awarded $500 upon winning. FanDuel would keep the extra $40.
`
`40. DFS competitions have become enormously popular and lucrative for all
`
`hosting parties. FanDuel has recently received a valuation of over $1 billion with a userbase
`
`547210.1
`
`11
`
`

`

`CASE 0:20-cv-00602-ECT-TNL Document 1 Filed 02/26/20 Page 12 of 38
`
`
`
`of over 6 million players.8 It has been estimated that FanDuel makes $100 off each
`
`customer per season.9
`
`41.
`
`In 2015, the MLB started to invest in and promote DFS fantasy baseball, and
`
`encourage its fans to participate in wagering on DFS competitions. The size of MLB’s
`
`investment remains undisclosed. However, it was described as “sizable enough to reap
`
`meaningful benefit from the rise of daily fantasy.”10
`
`42.
`
`The MLB’s involvement in advertising DFS competitions grew its popularity
`
`and induced its fans to participate in DFS competitions. In turn, by fans participating in
`
`DFS wagering, the MLB gains a quantifiable benefit financially not only through the
`
`sharing of contest fees with the DFS platform, but also through larger attendance at games,
`
`increased revenue through advertising, and general interest associated with the sport as a
`
`whole.
`
`43.
`
`The MLB’s official partnership with FanDuel established them as one of the
`
`MLB’s “authorized gaming operators.” This partnership grants FanDuel access to use
`
`MLB official team and league logos, opportunities for sponsorship deals, promotions with
`
`MLB member team constituents, and most importantly, access to MLB’s official data feed
`
`to be used within its gambling platform.
`
`
`8 Shoshanna Delventhal, How FanDuel and DraftKings Work, INVESTOPEDIA, (Jun. 25, 2019)
`https://www.investopedia.com/articles/investing/122415/how-fanduel-and-draftkings-work.asp
`(accessed Feb. 7, 2020)
`9 Id.
`10 Eric Fisher, A look into DraftKings’ MLB Deal, SPORTS BUSINESS JOURNAL (Apr. 20, 2015),
`https://www.sportsbusinessdaily.com/Journal/Issues/2015/04/20/Media/DraftKings-MLB.aspx
`(accessed Feb. 7, 2020)
`
`547210.1
`
`12
`
`

`

`CASE 0:20-cv-00602-ECT-TNL Document 1 Filed 02/26/20 Page 13 of 38
`
`
`
`44.
`
`Sportradar handles the distribution and monitoring of the official data feed
`
`and the resulting real game time statistics for MLB games to these DFS operators, such as
`
`FanDuel.
`
`45.
`
`The MLB’s and other Defendants’ aggressive marketing of DFS wagering
`
`competitions to its fans has resulted in hundreds of millions of dollars of participants’ entry
`
`fees being paid to FanDuel, for the financial benefit of Defendants.
`
`II.
`
`The Use of Electronic Devices to Steal Signs is Expressly Prohibited
`
`46. Defendant MLB, through the Office of the Commissioner, is responsible for
`
`the operation of Major League Baseball. The MLB has thirty constituent teams which
`
`include the Astros and Red Sox.
`
`47.
`
`The MLB’s constituent teams collectively own Defendant MLBAM, which
`
`is responsible for providing marketing services for MLB and its teams while providing
`
`oversight in the promotion of partnerships, such as that with FanDuel.
`
`48.
`
`The MLB Defendants are governed by its codified MLB Official Rules and
`
`other regulations, which explicitly state the league’s standards for on-field conduct.
`
`Pursuant to these Official Rules and other regulations, the use of any electronic devices to
`
`decode or attempt to decode the communications between a catcher and a pitcher,
`
`commonly referred to as “signs,” is prohibited.
`
`49. When an opponent gains recognition of the signs between a catcher and
`
`pitcher, or “steals” the sign, it can provide a significant advantage to the batter, who will
`
`then be aware of the upcoming pitch. When this is done by using electronic devices, it is
`
`in violation of the MLB Official Rules and other regulations. Illustrative of this point, MLB
`
`547210.1
`
`13
`
`

`

`CASE 0:20-cv-00602-ECT-TNL Document 1 Filed 02/26/20 Page 14 of 38
`
`
`
`pitcher Alex Wood stated, “I would rather face a player that was taking steroids than face
`
`a player that knew every pitch that was coming.”11
`
`50.
`
`The ability to take advantage of sign stealing became exceedingly easy in
`
`2014 when MLB constituent teams were allowed to create review rooms for the purpose
`
`of reviewing video footage to challenge plays called by the game officials. This practice is
`
`similar to what fans have seen in the NFL with “coach’s challenges” and “booth reviews.”
`
`51. With review rooms in every stadium, MLB teams, including the Astros and
`
`Red Sox, began using video and electronic devices to “steal” the signs of the opposing
`
`team’s pitcher and catcher, and created various schemes to relay the information from the
`
`review room to the batters. In 2017, numerous MLB teams reported concerns to MLB’s
`
`Office of Commissioner that clubs were using electronic devices to steal their signs.
`
`III. Sign Stealing Manipulated DFS Contests to the Detriment of the Class
`
`52.
`
`Electronic sign stealing directly affects player performance statistics, and
`
`therefore, the teams and players that participate in electronic sign stealing compromise the
`
`fairness and integrity of DFS wagering competitions. Because each contest is based on
`
`MLB players’ real-life performance during a given game, a violation of MLB Official
`
`Rules and other regulations manipulates DFS wagering by skewing competition outcomes
`
`and undermining the player selection process.
`
`53.
`
`Since at least 2017, the MLB has been well aware of its constituent teams’
`
`violations of its rules prohibiting electronic sign stealing. However, it elected to not take
`
`
`11 Alex Wood (@Awood45), TWITTER (Jan. 16, 2020, 1:37PM), https://twitter.com/Awood45
`/121792855156760577 (accessed Feb. 7, 2020)
`
`547210.1
`
`14
`
`

`

`CASE 0:20-cv-00602-ECT-TNL Document 1 Filed 02/26/20 Page 15 of 38
`
`
`
`reasonable steps to investigate, deter, prevent, remedy, or disclose the fraudulent conduct
`
`to the public.
`
`54.
`
`Instead, the MLB continued to encourage its fans to participate in DFS
`
`wagering competitions even though they knew that the statistical data that determines the
`
`outcomes of those competitions was affected by illicit cheating.
`
`55.
`
`This cheating was not publicly disclosed until November 12, 2019, when Ken
`
`Rosenthal and Evan Derllich of The Athletic reported that members of the Astros were
`
`using an electric system to steal signs between pitchers and catchers in violation of the
`
`MLB’s Official Rules. The MLB subsequently identified the offending individuals as
`
`Carlos Beltran and Alex Cora.
`
`56. According to The Athletic article, the Astros’ staff set up a video “feed from
`
`a camera in center field, fixed on the opposing catcher’s signs, hooked up to a television
`
`monitor that was placed on a wall steps from the team’s home dugout at Minute Maid
`
`Park.”12 Using the television monitor, Astros players would watch the feed and decode the
`
`opposing team’s signs. After recognition of a sign by the opposing team, the Astros’
`
`players would bang on a trash can in communication with the batter about the upcoming
`
`pitch. This is called the “Trash Can Scheme.”
`
`57. On November 18, 2019, it was reported that the MLB had been instructing
`
`video monitors to listen for the Trash Can Scheme while at Minute Maid Park, illustrating
`
`
`12 Ken Rosenthal and Evan Drellich, The Astros Stole Signs Electronically in 2017 – Part of a
`for Major League Baseball, THE ATHLETIC, (Nov. 12, 2019),
`Much Broader Issue
`https://theathletic.com/1363451/2019/11/12/the-astros-stole-signs-electronically-in-2017-part-of-
`a-much-broader-issue-for-major-league-baseball/ (accessed Feb. 7, 2020).
`
`547210.1
`
`15
`
`

`

`CASE 0:20-cv-00602-ECT-TNL Document 1 Filed 02/26/20 Page 16 of 38
`
`
`
`that the MLB had been aware of the organization’s cheating. The MLB nonetheless failed
`
`to disclose or adequately investigate the situation.13
`
`58.
`
`The MLB, who had launched their own investigation after the news of the
`
`Trash Can Scheme broke to the public, published its results on January 13, 2020. Relevant
`
`findings of the Astros conduct were as follows:
`
`a. At the beginning of the 2017 season, employees in the Astros’ video
`replay review room began using the live game feed from the center
`field camera to attempt to decode and transmit opposing teams’ sign
`sequences (i.e., which sign flashed by the catcher is the actual sign)
`for use when an Astros runner was on second base. Once the sign
`sequence was decoded, a player in the video replay review room
`would act as a “runner” to relay the information to the dugout, and a
`person in the dugout would notify the players in the dugout or signal
`the sign sequence to the runner on second base, who in turn would
`decipher the catcher’s sign and signal to the batter from second base.
`
`b. Approximately two months in the 2017 season, a group of players,
`including Beltran discussed that the team could improve on decoding
`opposing teams’ signs and communicating the signs to the batter.
`Cora arranged for a video room technician to install a monitor
`displaying the center field camera feed immediately outside of the
`Astros’ dugout [. . .] One or more players watched the live feed of the
`center field camera on the monitor, and after decoding the sign, a
`player would bang nearby trash can with a bat to communicate the
`upcoming pitch type to the batter; and
`
`c. [T]he Astros’ replay review room staff continued, at least for part of
`the 2018 season, to decode signs using the live center field camera
`feed, and to transmit the sign to the dugout through in-person
`communication [hereinafter, the “Astros
`Replay Room Scheme”].
`
`
`
`13 Rob Manfred, Statement of the Commissioner, MAJOR LEAGUE BASEBALL (Jan. 13, 2020) at 2,
`https://img.mlbstatistic.com/mlb-images/image/upload/mlb/cglrhmlrwwbkacty2717.pdf
`(accessed Feb. 7, 2020).
`
`547210.1
`
`16
`
`

`

`CASE 0:20-cv-00602-ECT-TNL Document 1 Filed 02/26/20 Page 17 of 38
`
`
`
`59.
`
`The Replay Room Scheme and Trash Can Scheme were not the only offenses
`
`relevant to electronic sign stealing in MLB. Rosenthal and Drellich further reported
`
`allegations against the Red Sox that they had in place a corrupt replay room scheme of their
`
`own throughout the 2018 season.14
`
`60.
`
`The “Red Sox Replay Room Scheme” was brought to the Red Sox
`
`organization by Alex Cora, originator of the Trash Can Scheme for the Astros. According
`
`to Rosenthal and Drellich, “players visited the video replay room during games to learn the
`
`sign sequence opponents were using.”15
`
`61. Akin to the Astros’ corrupt practices, the Red Sox utilized electronic devices
`
`to steal their opponents’ signs in violation of MLB Official rules.
`
`62.
`
`The MLB is currently investigating the allegations against the Red Sox and
`
`will soon publish its findings about the organization’s corrupt practices.
`
`63.
`
`The Replay Room Scheme, Trash Can Scheme, and Red Sox Replay Room
`
`Scheme significantly affected the player performance statistics distributed by Sportradar
`
`of all MLB players involved, whether in their favor or as an opponent. The schemes also
`
`harmed the Plaintiff and the Class by distorting the player performance statistics, resulting
`
`in unfair and dishonest DFS baseball competitions.
`
`
`14 Ken Rosenthal & Evan Drellich, MLB’s sign-stealing controversy broadens: Sources say the
`Red Sex used video replay room illegally in 2018, THE ATHLETIC (Jan. 7, 2020),
`https://theathletic.com/1510673/2020/01/07mlbs-sign-stealing-controversy-broadens-sources-
`say-the-red-sox-used-video-replay-room-illegally-in-2018/ (accessed Feb.7, 2020)
`15 Id.
`
`547210.1
`
`17
`
`

`

`CASE 0:20-cv-00602-ECT-TNL Document 1 Filed 02/26/20 Page 18 of 38
`
`
`
`64.
`
`Further, Sportradar, as the exclusive distributor and monitor of these
`
`statistics, equipped with investigative services and integrity protection measures, knew or
`
`was willfully unaware of the fraudulent conduct resulting in the manipulation of the player
`
`performance statistics that it distributed to DFS operators, including FanDuel.
`
`65. As a result, Plaintiff and other contestants participating in DFS wager
`
`competitions, including specifically FanDuel, were induced by Defendants to compete in
`
`fraudulent competitions to their financial detriment.
`
`IV. Defendants’ Profited From Encouraging the Class to Participate in Unfair
`DFS Wagering Competitions
`
`66.
`
`The MLB have been aware, or were willfully unaware, of allegations against
`
`teams using electronic devices to steal signs in violation of its Official Rules for years.
`
`67.
`
`Per the MLB’s investigation of the Astros, investigators were told that as
`
`many as eight other MLB constituent teams were electronically stealing signs.16
`
`68.
`
`Several formal complaints had been filed with the MLB regarding the use of
`
`electronic devices to steal signs described herein:
`
`a. In 2017 the New York Yankees filed a complaint alleging that the
`Boston Red Sox were stealing signs using Apple Watches in
`contravention of MLB rules.
`
`b. In August 2018 the Oakland Athletics filed a complaint alleging that
`the Houston Astros were stealing signs using electronic equipment in
`contravention of MLB rules.
`
`
`
`16 Tom Verducci, Why MLB Issued Historic Punishment to Astros for Sign Stealing, SPORTS
`ILLUSTRATED (Jan. 13, 2020), http