DraftKings Hit With Lawsuit over Micro-Betting Patent Infringement

Popular sportsbook operator DraftKings is being sued for patent infringement in a New Jersey federal court over its micro-betting services.

DraftKings Is Being Sued Over Micro-Petting Patents

Micro-Gaming Ventures, LLC, a Texas-based entity, is the plaintiff who filed the lawsuit on May 9th in the US District Court for the District of New Jersey. According to Micro-Gaming Ventures, DraftKings’ sportsbook platform infringes on five separate patents, which allegedly relate to technology underpinning micro-betting and location-based betting.

The patented inventions offer several improvements over prior technologies, particularly in managing micro-bets within broader sporting events and verifying users based on their geographic locations. One key advantage is the ability of a configured computer system to determine when a micro-bet becomes available to users and when it closes to additional participants.

What Exactly Is Micro-Betting?

Micro-betting, also known as in-play betting, enables users to wager on individual moments during a sporting event. For example, predicting the result of the next pitch in baseball or the next play in football is considered a type of micro-betting.

The complaint states that the patents were created by inventors Michael Shore, Alfonso Chan, Luis Ortiz, and Kermit Lopez between 2010 and 2013, before micro-betting technology became widely used in the United States. These patents pertain to systems and methods for handling wagers on “micro-events” within larger games, as well as verifying users based on their geographic location.

What Does the Plaintiff Want?

Micro-Gaming Ventures is seeking damages for past instances of patent infringement and is requesting a full accounting of all alleged infringing activities. The company has also demanded a jury trial.

The lawsuit highlights DraftKings’ $195 million acquisition of micro-betting provider SimpleBet in 2024 as evidence of the substantial commercial value of the technology. It also emphasizes the significance of the patent filing dates, which predate both New Jersey’s move to legalize online gambling in February 2013 and the Supreme Court’s 2018 ruling in Murphy v. NCAA that opened the door to legalized sports betting nationwide.

Micro-Gaming Ventures’ lawsuit justifies filing in the New Jersey district court by noting that DraftKings operates an office in Hoboken, New Jersey, as the company has an office there.