DraftKings embroiled in extortion legal complaint involving a pro sports bettor

A legal case involving DraftKings and prominent sports bettor Gadoon ‘Spanky’ Kyrollos has taken a twist after claims of extortion and violence were made public earlier this week.

On June 25, a court filing in New York emerged, detailing how DraftKings employees had been accused of deliberately leaking personal information to a high-profile sports bettor as part of an alleged extortion plan.

A complaint filed in Queens County details an altercation between a masked man and the anonymous plaintiff, named as “John Doe”, on March 30, 2023, in Long Island.

The physical exchange is alleged to have involved the plaintiff being grabbed, spun around and the subject of death threats unless he paid $500,000 to Kyrollos, the aforementioned prominent bettor.

According to the filing, there is also a video of the masked man waiting outside the plaintiff’s apartment for three hours before the altercation.

The plaintiff has accused unidentified members towards the top of the DraftKings hierarchy of knowingly handing over his address, sensitive personal information, financial history, and betting history to Kyrollos.

The complaint names DraftKings VIP host Joe Di Chiaro who told Doe that there had been a breach of his account but couldn’t comment further given it was an ongoing investigation.

The document claims that DraftKings and Di Chiaro spent “10 days of stonewalling and refusing to provide any information regarding the hack” before informing Doe he should redirect question to DraftKings’ privacy department.

Doe allegedly told Di Chario he had been subject to death threats but that his “attitude appeared to have changed completely since Plaintiff had first reported the danger from Spanky.”

The complaint said: “Spanky and the masked man did not act alone […] DraftKings loaded the proverbial gun and put it in Spanky’s hand. [The] plaintiff’s life was never the same.

“This is a case about DraftKings — one of the biggest and most profitable sports betting companies in the world — knowingly and wilfully aiding and abetting a violent assault, battery, and death threat, (and later, a significant computer hack).”

In a statement, DraftKings declared: “The complaint filed against DraftKings in March 2024 by an unnamed plaintiff is full of inaccuracies and baseless allegations.

“In the complaint, the plaintiff does not identify any DraftKings employee, but rather alleges on ‘information and belief’ that an unknown and unidentified DraftKings employee provided private account information to ‘Spanky’ and to additional unnamed third parties.

“DraftKings has found no evidence of anyone at DraftKings providing plaintiff’s information to a third-party, and DraftKings denies acknowledging any such ‘security breach’.”

The Nasdaq-listed operator went on to add that it is aiming to have the case dismissed by Friday, June 28.

The original complaint was filed by a Long Island-based lawyer Steven Jacobs, who has now been further embroiled in the case after allegations he is in fact the John Doe named as the plaintiff.

Hours after that news broke, Kyrollos issued a statement on X, claiming that Jacobs had filed the anonymous complaint on behalf of himself.

Jacobs is currently in the midst of litigation pending appeal against one of the men named in the extortion complaint, Oscar Jones.

In April of last year, Jones filed a lawsuit against Jacobs alleging that Jacobs defrauded him out of nearly $500,000 – exactly the same amount the John Doe was alleged to owe as part of the DraftKings complaint.

As part of the lawsuit in April 2023, it has been established that Jacobs’s home address in Long Island City and his law firm’s address is onLexington Ave. That also matches details found in the DraftKings complaint.

The suit reveals that Jones feels Jacobs “relied on the air of legitimacy” that comes with Jacobs’ employment at Herbert Smith Freehills to exploit his trust and that he used false pretenses to withhold $445,071.59 from Jones.

Jones claims that he struck a deal with Jacobs that involved the former funding the latter’s DraftKings account.

Given that Jacobs had a history of losing with DraftKings, as per the suit, it was agreed that the plan was to share the betting proceeds.

Jacobs is alleged to have received $82,000 to deposit, while Jones claims he is owed $14,000 in money obtained through DraftKings bonuses alongside shared profits of just under $350,000.

Jones has made clear he was under the impression he would receive his money once Jacobs had withdrawn $200,000. However, Jacobs is alleged to have told Jones that DraftKings suspended his account and refused to pay him unless he signed an affidavit of eligibility, something he initially opted against.

Soon after, Jones requested that Jacobs file a complaint against DraftKings to the New York State Gaming Commission (NYSGC), and though he agreed to, not before Jones had agreed to sign a document releasing Jacobs from liability.

It has since emerged that though Jacobs did send a complaint to the NYSGC, just five minutes later he sent another email to the organization in which he asked the NYSGC to ignore his first email and that it was sent by mistake.

In full, his follow-up email read: “Dear Gaming Commission, with sincere apologies, the email/attachment below was accidental, and was not meant to be sent to you. I am a gaming lawyer and I drafted it for a gaming training module. It is not a real complaint.

“I meant to include your email address in the document but not to send it to you. Please ignore and delete the email attachment. I apologize again.”

After days without an update regarding the status of the complaint which had unbeknownst to Jones been dubbed ‘not a real complaint’ by Jacobs, text messages between the pair are alleged to contain comments made by Jacobs in which he threatens to ‘push Jones into bankruptcy.’

Once Jones had filed the lawsuit, he put forward texts that are allegedly from Jacobs in a group chat containing the two of them as well as a third unnamed member that read: “I would strongly advise you to get Oscar to back off from his frivolous and psychotic litigation tactics. 

“His sole goal of destroying my career is illegal, and if he goes through with it your name, business and betting tactics will inevitably be plastered all over the NY Courts system. It will be disastrous for all parties.”

Jacobs continued by threatening to alert every sportsbook across the country about Jones’ illegal operation, as well as the FBI.

The suit put forward by Jones last year states that he was of the belief that given Jacobs’ standings as an attorney well versed in both gambling and sports law, if there was anything illegal in the nature of the pair’s partnership Jacobs would not have participated.

It is important to note that Kyrollos has not been named in the suit against Jacobs, but the Doe suit alleges that the famous bettor is an associate of Jones’ and that the two threatened Jacobs.

Jones has been told by New York Judge Mary V. Rosado that he is not permitted to sue seeking damages and restitution and instead, has seen Jacobs’ motion to dismiss granted.

Jones will be required to pay Jacobs’s attorney fees alongside a fee of $250,000 for violating the agreement he signed not to pursue legal action against him.

Kyrollos’ lengthy statement on social media did include a prediction in which he claims: “I believe one of three things happened: Either one, Steve Jacobs wound up stealing the money, or two, he gambled it all away. Or three, he just booked our bets himself (instead of placing the bets at DK) – hoping we would lose.”

Jones has appealed Judge Rosado’s decision, though that appeal has not yet reached a verdict.