Baseball Players’ Case Against DraftKings Survives Motion to Dismiss

Let’s face it. Despite putting pitchers on the clock, baseball is still boring. According to SportsLawBlogger, estimates range, but its seems clear that the ball is play for less than twenty minutes during a typical three hour baseball game. That’s a lot of down time. How does one make a game that is 90% dead time interesting? Fortunately, baseball, dull as it is, generates a lot of statistics, and so one can devise endless ways for people to bet on baseball. Who will win? What will the final score be? Will player X get a hit? A double! A triple! An RBI? The mind boggles at the possibilities. 

Enter DraftKings Inc. (DraftKings) and bet365 Group Limited (bet365), two gambling businesses that provide a virtual space in which people can bet on baseball, among other things, to their hearts’ content. Get no rush from a slider just off the inside corner to fill the count with two outs and runners in scoring position? Maybe you will if you have $1000 riding on the next pitch, even if you have no abiding interest in who wins the game as both are out of playoff contention at this point in the season. Unless it is fouled off.

The problem is that DratKings and bet365 (collectively Defendants) use the names, images, and likenesses (NILs) of Major League Baseball players, and the Players Association, through its subsidiary MLB Players, Inc. (MLBPI) claims exclusive right to use the NILs of three or more MLB players in a calendar year. In September, 2024, MLPPI filed suit against Defendants in the U.S. District Court for the Eastern District of Pennsylvania alleging (1) statutory violations, (2) misappropriation of publicity, (3) misappropriation of identity, and (4) unjust enrichment. Defendants moved to dismiss.

In MLB Players Inc. v. DraftKings, Inc., the District Court denied Defendants’ motion to dismiss. The Court first considers at length and rejects Defendants’ challenges to MLBPI’s standing. The statute at issue prohibits the unauthorized use of a natural person’s valuable “name or likeness” for “any commercial or advertising purpose.” The Court was satisfied that all current MLB players are natural persons and did not require the identification of individual players. The Court was also satisfied that the players’ names and likenesses have commercial value. bet365 argued that the images and likenesses were not being used for commercial purposes, but the statutory language is broad. The statutory claim survives. The common law misappropriation claim survives for the same reasons.

The Court could not resist calling Defendants out on strikes on the unjust enrichment claim. Defendants rely on a decision called Pellegrino, and the Court is not a fan. Pellegrino misapplies precedent (strike one); it’s reasoning was faulty (strike two); and it seems to be inconsistent with both Pennsylvania law on unjust enrichment and Third Circuit precedent (strike three). The Court was more impressed with the lineup of district court decision on the other side (baseball pun in original).

Defendants next argue that their use of the players’ names and likenesses is protected under a public interest exception because they are “newsworthy.” The discussion is protracted, but ultimately, the Court is not inclined to decide the issue of newsworthiness on a motion to dismiss. The Court makes clear that the bar for Defendants is going to be high. In order to qualify under the public interest exception for newsworthiness, the Defendants’ use of the players’ names and likenesses must be “associated with a news report or news presentation having a public interest.” It will be a challenge for the sports betting platforms to persuade the Court that they are engaged in news reporting or presentations, even though an Indiana court seems to have bought that argument. Their social media posts might have a better shot at qualifying for the exception, but the Court was still unwilling to rule in their favor on a motion to dismiss.

The Court rejected bet365’s argument that the misappropriation statute abrogated the common law cause of action, and it followed most courts that have faced the issue by declining to decide Defendants’ First Amendment affirmative defense on a motion to dismiss. The analysis requires a balancing of multiple factors and a determination of the nature of the speech — commercial or non-commercial — at issue. Facts relevant to that analysis will have to be developed through discovery.

The parties are reportedly now engaged in settlement negotiations.