DraftKings Faces Extortion Lawsuit as New York Court Allows Case to Proceed
DraftKings is grappling with a lawsuit from Steven Jacobs, who alleges the company leaked his personal data, triggering harassment, threats, and an assault. Filed in a New York federal court, the case took a key turn this month when a judge greenlit parts of Jacobs’s claims to move forward.
Jacobs’s Allegations
The heart of the suit lies in a chilling incident from March 2023. Jacobs claims a masked man ambushed him near his home, demanding $500,000 and threatening his life if he didn’t pay up.
He pins the attack on Gadoon “Spanky” Kyrollos, a well-known professional bettor, asserting that DraftKings handed over his personal details, address, betting history, and more, to make it happen. For Jacobs, this breach turned his DraftKings account into a liability, exposing him to real-world danger.
Kyrollos, banned from betting directly with DraftKings, allegedly used Jacobs as a proxy to place wagers, a common workaround for sharp bettors. Jacobs says the extortion stemmed from this arrangement gone sour, with DraftKings as the enabler.
DraftKings Pushes Back
DraftKings isn’t taking the accusations lying down. The company firmly denies any wrongdoing, stating it has found no evidence of an employee leaking Jacobs’s info to Kyrollos or anyone else.
Calling the claims baseless, DraftKings moved to dismiss the suit entirely. Even if something shady happened, it wasn’t on their watch or their dime. Kyrollos backs this up, insisting he couldn’t access DraftKings data and only bluffed about having insider pull to spook Jacobs.
Kyrollos adds fuel to the fire, claiming Jacobs owes “over a million dollars” to various parties, painting him as a debtor dodging accountability. DraftKings, meanwhile, hopes to quash the case before it digs deeper into their operations.
Court’s Mixed Ruling
The federal court in New York delivered a split decision this month. On one hand, it tossed out Jacobs’s claims of intentional or negligent emotional distress, finding them too thin to stand. On the other hand, it let his core allegations, DraftKings aiding assault and battery, survive the dismissal motion.
The judge ruled there’s enough meat on those bones to warrant a closer look, a win for Jacobs as of March 11, 2025.
This ruling pivots the case into discovery, where DraftKings might have to cough up internal records, emails, or chats tied to Jacobs’s account. It’s a phase that could unearth or bury the truth behind his claims.
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