DraftKings and FanDuel Face Patent Suits Tied to Trump’s Commerce Secretary
Interactive Games LLC, a Cantor Fitzgerald affiliate, has sued DraftKings and FanDuel in federal court for infringing five patents tied to mobile gambling technology
A Cantor Fitzgerald affiliate has sued DraftKings and FanDuel in federal court, alleging the two largest US sports betting operators infringed patents covering core mobile gambling technology.
The lawsuits add an unusual dimension to an already complicated political landscape for the gaming industry: two of the five patents at the center of the claims were co-invented by Howard Lutnick, who now serves as US Commerce Secretary under President Donald Trump.
The suits were filed Thursday by Interactive Games LLC, a successor entity to Cantor Gaming, in federal district courts in Massachusetts and New Jersey. The Massachusetts complaint targets DraftKings platforms. The New Jersey complaint names FanDuel and its parent Betfair as defendants.
What the Patents Cover
Interactive Games says the five patents at issue cover systems for verifying users’ identities and locations on mobile devices, as well as technology designed to detect and prevent tampering in smartphone gambling applications.
These are not peripheral features. Identity verification and geolocation confirmation are mandatory components of every state-licensed sports betting and online casino platform in the United States. Every mobile bet placed legally in the country depends on a system that confirms the user’s identity and that their device is physically located within a jurisdiction where wagering is permitted.
Interactive Games alleges that DraftKings’ mobile apps, including its sportsbook, casino, fantasy sports, and other betting platforms, infringe those patents. The FanDuel complaint makes parallel allegations regarding its secure smartphone gambling systems.
Lutnick’s Connection
Two of the five patents were co-invented by Lutnick and other employees of Cantor Gaming while Lutnick was serving as CEO of Cantor Fitzgerald, its parent company. Cantor Gaming was the gambling technology arm of the broader Cantor Fitzgerald organization. Lutnick founded the unit in the mid-2000s and built it into a licensed Nevada gaming operator with sports betting technology and casino products.
When Lutnick was confirmed as Commerce Secretary last year, he stepped down as both CEO of Cantor Fitzgerald and chairman of Interactive Games LLC. Cantor said at the time that Lutnick had divested himself of all his Cantor business interests. Interactive Games is registered as a Nevada business and is identified in the filings as a Cantor affiliate.
The Commerce Secretary has not disclosed an ongoing interest in the litigation. But the fact that a company he chaired and co-invented patents for is now suing the two dominant US sports-betting operators adds a political dimension that goes beyond a standard patent dispute.
A Pattern of IP Litigation
This is not Interactive Games’ first legal action against DraftKings. The company previously filed a patent infringement case against DraftKings in federal court in Delaware in June 2019, before the mobile sports betting market existed at its current scale. That earlier case indicates a sustained intellectual property strategy around the mobile gambling technology portfolio Cantor Gaming developed during its years as an active Nevada gaming operator.
DraftKings and FanDuel collectively dominate the US sports betting market, holding the largest combined share of handle and revenue in every state where they operate. Both companies have invested heavily in proprietary mobile technology, but also rely on third-party systems and infrastructure for various components of their platforms.
The precise claims in the current suits, and which specific systems Interactive Games alleges were infringed, will become clearer as the cases proceed through discovery.
Neither DraftKings nor FanDuel had publicly responded to the suits as of the filing date.
The Broader Context for the Gambling Industry
The lawsuit arrives at a turbulent moment for both operators. DraftKings stock is down roughly 37% year-to-date as prediction market platforms have pressured traditional sportsbook market share. FanDuel’s parent Flutter has seen similar stock pressure.
Both operators are simultaneously managing legal exposure from multiple directions, including the prediction market competitive threat, state-level regulatory scrutiny, and now a federal patent action tied to the foundational technology of their mobile products.
Patent litigation in the gaming technology space has grown more active as the US market has matured. With hundreds of millions of dollars in annual revenue now flowing through mobile platforms, the value of controlling key underlying patents has increased substantially. Interactive Games is seeking unspecified monetary damages in both cases.
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