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Colossus Bets Takes DraftKings to Court over Alleged Infringement of Cash-Out Patent in the US

Colossus Bets has started legal action against the US sports betting and daily fantasy sports operator DraftKings over patents associated with a cash-out feature.

The patent infringement case was filed in the US District Court for Delaware. In its lawsuit against DraftKings, the London-based gambling operator is set to be represented by the DLA Piper law firm. The legal action alleges that the US sportsbook and daily fantasy sports operator infringed 7 patents covering gaming and sports betting products, all of which incorporate the aforementioned “Cash-Out” feature.

Colossus Bets has an extensive and diversified international patent portfolio of games and sports wagers that use the cash-out feature, including whether a player uses it. For the time being, the company owns a total of 7 patents in the US that are related to a cash-out product. All of them refer to a full or partial buy-out offer which is made at any time before a certain wagering event is brought to an end.

The gambling operator claims that its patents apply to all bets that are currently accepted in the US with a cash-out feature since the US Supreme Court repealed the Professional and Amateur Sports Protection Act (PASPA) three years ago.

Colossus Bets First Tried to Resolve the Issue with DraftKings Out of Court

According to the lawsuit, Colossus Bets first notified DraftKings of its patent right in 2018. This, however, has not stopped the sports betting and daily fantasy sports company from continuing to offer its products, although it was repeatedly notified of the infringement. This made Colossus Bets take the company to court and seek to recover all damages it suffered as a result of the infringement, including increased harm for deliberate and willful infringement.

In its legal action against DraftKings, the London-based gambling company claims that, given the scope of its patent portfolio, the current proceedings would probably lead to negative consequences for the entire gaming sector and the US gambling market worth billions of dollars.

Bernard Marantelli, the co-founder of Colossus Bets, explained that the company had tried to resolve the issue in a friendly and peaceful manner and provided DraftKings with the opportunity to make this happen. Since this did not happen, it decided to seek its rights in court because it takes intellectual property extremely seriously and is willing to protect its rights and income across the US gambling industry.

This is not the first time when Colossus Bets has filed such a lawsuit. The company previously started similar legal action related to cash-out features against the Australian gambling and sports betting giant Tabcorp. On the other hand, this is also not the first infringement case faced by DraftKings in 2021, as the esports betting technology provider Engine Media Holdings filed its own legal action over some patents concerning the integration between live events and skill games.

For the time being, Colossus Bets also host patent licenses with a number of other gambling companies, including bet365 and Esports Technologies, under which they are allowed to use the patented technology. Apart from the US, its patent portfolio also covers Eurasia, the Philippines, Australia, Japan, Indonesia, South Korea, Singapore, Nigeria and South Africa.

 Author: Hannah Wallace

Hannah Wallace has been part of our team since the website was launched. She has a master’s degree in IT.