The second great reckoning for daily fantasy and free-to-play apps that resemble online sportsbooks might be underway.
The last time it occurred, DraftKings and FanDuel pulled out of Nevada, never to return, and were litigated out of New York until laws changed.
This time it’s Fliff under scrutiny in California and Ohio. Lucra Sports, Prediction Strike, TeamStake, and Dynasty Owner are also being investigated by the state gambling authorities in Ohio.
California Plaintiff Launches $5 Million Class Action Suit vs. Fliff
In California, Fliff is described as “the epitome of an online sportsbook” in a class action suit filed by plaintiff Bishoy Nessim. Court documents deem the “free-to-play” app in violation of the Wire Act, the California Unfair Competition Law, and anti-bookmaking laws there. The suit seeks $5 million and the stoppage of Fliff doing business in the state.
Voters in California resounding defeated two different propositions that would have legalized sports betting under different conditions. Prop 26 would have allowed for retail sports betting at tribal casinos and a select group of horse racing tracks.
Prop 27 would have opened the nation’s most populated state to mobile and online wagering conducted by national and global brands. Under a wave of extremely negative advertising from both sides, each measure was walloped, leading many observers to surmise it could be several years before sports betting is broached, much less legalized in the state of nearly 40 million.
This is where Fliff has rushed in to fill a void with its very-sportsbook-like free-to-play social platform, a detail noted in the suit.
The June 6 filing takes particular umbrage with so-called “Fliff Cash,” which “has a dollar-for-dollar equivalence to actual money and can be withdrawn and wired directly to the users’ bank accounts.”
“Despite that public rebuke, Fliff facilitates the ability for California residents to make online sports wagers to win real money without any approvals, regulations, oversight, or taxing,” the suit claims. “To avoid any regulation or legal oversight, Fliff claims to be a free-to-play operator of sweepstakes with the chance for users to ‘play sports prediction games for entertainment.’ But, in the real world, alleged sports prediction games are nothing more than online sports gambling.”
It adds:
Fliff is available for free download on both the Apple and Android devices. Users can play for free by using Fliff Coins, this tactic is known widely as the ‘free-to-play’ business model; Lure the consumer in with the free option, then switch them to playing (in this case gambling) with real money, i.e., ‘Fliff Cash.'”
Nessim estimates he lost between $7,000-8,000 gambling with Fliff.
Gaming Today has contacted Fliff founder Matt Ricci for comment.
Ohio Regulators Probe Apps That Resemble Sports Betting
The Ohio Casino Control Commission in May revealed its investigation into the five platforms including Fliff in May. Prediction Strike had previously been issued a cease-and-desist order in New Jersey for offering unlicensed sports betting there.
At issue with each of these sites and others, potentially, is that they offer players markets that mimic traditional prop-type bets. In many of these markets, wins and losses depend on a player’s points totals, resembling a spread.
Whether this will be a transformative moment for these companies remains to be seen. DraftKings and FanDuel opted not to apply for licenses in Nevada when the state determined in 2015 that DFS constituted gambling. While they still offer fantasy in numerous states, they’ve since pivoted to become major national sports betting operators.
DraftKings and FanDuel were also shut out of New York for a period in 2015 until the state legalized the pastime in 2016. Then-New York Attorney General Eric Schneiderman had in 2015 ordered them to halt business as illegal gambling companies.
Fliff Founder: Patrons Are Not Necessarily Sports Bettors
Fliff founder Matt Ricci told California Casinos in 2022 that he believed his customers were looking for a different experience than traditional sports bettors.
I think having the free-to-play aspect of the product really is something that resonates with a lot of people that are more into more traditional mobile gaming, a different type of audience that doesn’t necessarily want to have to spend their money. They just want to enjoy the games played for fun. And so I think we benefit from the fact that people in states like New York, there’s a lot of buzz and conversation around sports betting. And so for the type of people that would use Fliff, it’s a lot of people that really just want to be part of the conversation of sports betting. They want to be able to not necessarily spend a lot of money. They just want to be able to some skin in the game or picks that they’ve made that they can then be part of the conversation with their friends.”
It’s now up to state regulators and the court system to determine if they’re getting one anyway.
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