Fanatics Founder and CEO Michael Rubin in his New York office.
The Washington Post | Getty Images
Sports merchandise giant fanatics are hitting back at the sports book giant Kings Project In an ongoing legal battle over fanatics' hiring of a senior figure Kings Project executive.
In a legal brief filed late Thursday in the U.S. District Court in Massachusetts, zealots accused DraftKings of distorting reality and character assassinating its former senior vice president of business development, Michael Hermalin.
In February, Hermaline accepted the position of President of Fanatics VIP and Head of Fanatics' Los Angeles office. He reports directly to CEO Michael Rubin.
DraftKings is suing Hermalyn in federal court, arguing that he downloaded confidential company documents and attempted to hire other employees away from DraftKings.
In their filing, the bigots claim that DraftKings has a “culture of retaliation” and makes Hermalyn an example of instilling fear in “other DK employees looking to jump ship.”
According to its statistics, 186 DraftKings employees have applied to work at Fanatics since the company announced in 2021 that it would launch a sportsbook, according to the filing.
In the rapidly expanding sports gambling industry, Fanatics is a newcomer, late to the game but backed by billionaire Rubin and an enviable database of customers who buy team jerseys, ball caps online or sports memorabilia through its collectibles business.
The entrance from the elevators, designed to resemble a stadium entry tunnel, was photographed at the DraftKings office in Boston.
David L. Ryan | Boston Globe via Getty Images
DraftKings ranks second in sports betting market share, behind FanDuel, which is owned by flutter. But these two leaders dominate, each with a market share of nearly 80%.
Competition is fierce – even with popular gambling brands such as Caesar And BetMGM Fighting for customers' dollars. They invest in technology to improve their apps, customize marketing and promotions, and facilitate deposits and withdrawals. Much of it is private property.
But sports gamblers are illegal. They chase promotions or the best odds, and many have more than one betting app downloaded on their phones.
The most valuable clients, the VIPs, work with casino or sports betting hosts, who build relationships and try to generate loyalty.
DraftKings alleges that Hermalyn contacted one of DraftKings' most valuable clients to alert him that Hermalyn was leaving his employer.
“The evidence against Mr. Hermalin is open and shut. He stole valuable trade secrets, destroyed evidence to cover his tracks and then lied about it all,” Oren Snyder, a Gibson Dunn attorney who represents DraftKings, said in a statement. CNBC on Thursday.
In a summary filed on March 14, DraftKings outlines what it describes as corporate espionage. It insists that the zealots are trying to steal its VIPs, its valuable employees and its strategy to clone DraftKings' business.
In their response, the bigots vehemently deny the allegations, saying DraftKings intentionally distorts reality and engages in character assassination.
“To be clear, this is not a case where an employee has been hired to move a book of business from one company to another: Fanatics already has 100 million customers in the U.S., and both DK and Fanatics have tens of thousands of significant customers and many if not all of those customers are known to They overlap,” the company said in its filing.
DraftKings has petitioned the court to prevent Hermaline from working for Fanatics. The judge denied that petition but issued a temporary restraining order to prevent Hermaline from soliciting clients or employees from her former employer.
