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Another Freedom of Speech Win For The Fantasy Sports Industry

And Maybe the Traditional Gambling Industry As Well?
Late last month, in Daniels v. Fan Duel, Inc., et ano, Case No. 18S-CQ-001344, 2018 WL 52575775 (Ind. Oct. 24, 2018), the Indiana Supreme Court sided with the fantasy sports industry holding that the use of the names, pictures, and statistics of athletes by online-fantasy sports operators without the athletes’ consent does not violate the right of publicity under Indiana law because such use falls within the “newsworthy value” exception to the statute. 

While the precise effect of this decision will play out in the coming months and years, we believe there are three key takeaways. First, the Indiana Supreme Court reaffirmed the ability of online-fantasy sports operators to utilize the names and statistics of athletes without their consent, further fortifying a landmark Eighth Circuit decision from 11 years ago. Second, the Daniels decision appears to extend that Eighth Circuit ruling by specifying that freedom of speech trumps the right of publicity at least insofar as it pertains to the manner in which athletes’ pictures are used in online fantasy sports contests. Finally, the logical extension of the Daniels decision is that operators of online sites that offer traditional gambling should be able to enjoy the same freedom of speech protections and thus should be able to make similar uses of athletes’ names, statistics, and pictures.

The Indiana Supreme Court Daniels Decision

The Plaintiffs in Daniels, collegiate student-athletes, alleged in Indiana state court that the Defendants, FanDuel, Inc. and DraftKings, Inc., violated their rights of publicity under Indiana law by using their names, pictures, and statistics without their consent in the operation and promotion of online fantasy sports contests. The Defendants removed the action to the U.S. District Court for the Southern District of Indiana. The District Court dismissed the suit, finding no violation of the right of publicity. Plaintiffs appealed to the United States Court of Appeals for the Seventh Circuit. Rather than opine on how the Indiana Supreme Court would interpret the Indiana right of publicity statute, the Seventh Circuit certified a limited question to the Indiana Supreme Court – whether the consent of athletes is required for online fantasy-sports operators to utilize their names, pictures, and statistics in the operation and promotion of online fantasy-sports contests?

The Indiana Supreme Court answered this limited question in the negative and found that the use of athletes’ names, pictures, and statistics falls within the “newsworthy value” exception built into the state’s right of publicity. This exception provides that the right of publicity does not apply to “[t]he use of a personality’s name, voice, signature, photograph, image, likeness, distinctive appearance, gestures, or mannerisms in … [m]aterial that has political or newsworthy value.” Ind. Code § 32-36-1-1(c)(1)(B). The Court stated that the term “newsworthy value” should be given broad reach in order to avoid First Amendment issues. The Court also noted that the Defendants’ use of athletes’ names, images, and statistics resembled the publication of the same information in newspapers and websites, which was not “stripped of its newsworthy value” merely because it is used in the context of a fantasy sports game. Daniels, 2018 WL 5275775, at *5.

Daniels Reaffirms and Appears to Extend the Eighth Circuit C.B.C. Decision

Although the Seventh Circuit has not yet rendered the ultimate resolution of the Daniels appeal, the Indiana Supreme Court decision is notable in that it marks the second substantial and respected appellate court to side with an operator of online-fantasy sports contests with respect to the ability to use athletes’ names and statistics. The decision in Daniels affirms the strength of the reasoning behind the holding of the Eighth Circuit in C.B.C. Distribution and Mkting, Inc. v. Major League Baseball, 505 F.3d 818 (8th Cir. 2007).[1] In C.B.C., the Eighth Circuit held that the First Amendment rights of a company that provided fantasy baseball contests to use athletes’ information outweighed the athletes’ potential right of publicity regarding that use.

The Eighth Circuit in C.B.C. applied Missouri’s right of publicity law and found that a claim could be stated that the producer of fantasy baseball contests had violated the athletes’ rights of publicity.[2] Notwithstanding the fact that such a claim was potentially viable, the court ultimately held that the First Amendment enabled the producer to use the athletes’ information. As such, the ultimate holdings of both Daniels and C.B.C. have the same effect – freedom of speech considerations trump any right of publicity claim an athlete may have and thereby allows online-fantasy sports providers to utilize athletes’ information without consent.

Both the Indiana Supreme Court in Daniels and the Eighth Circuit in C.B.C. highlighted the fact that the information used in online-fantasy sports contests was readily available in the public domain to support the holding that such information could be utilized by online-fantasy sports operators. It is also worth noting that both decisions relied on the fact that a consumer would not likely believe that an athlete is endorsing a fantasy sports site simply because the athletes’ name, picture and statistics are being used in connection with fantasy sports team building decisions and later scorekeeping/statistical reporting.[3]

Daniels not only adds to the body of case law begun in the landmark C.B.C. case, but significantly, Daniels appears to go further than C.B.C. Specifically, while C.B.C. was limited to the names and statistics of athletes, Daniels states that online-fantasy sports operators could use the names, statistics, and pictures of athletes in their fantasy sports offerings without running afoul of the right of publicity. As such, the Indiana Supreme Court in Daniels allows for online-fantasy sports operators to have greater abilities with respect to the use of athletes’ information/images.

Potential Implication of Daniels for Traditional Online Gambling Sites

While each state addresses the right of publicity in its own way (some by statute, some by common law and some do not recognize the right at all) and the decision in Daniels, by its specific terms, interprets only the Indiana right of publicity statute, the ruling is likely to have broader persuasive effect. Specifically, the fact that the Indiana Supreme Court deemed athletes’ names, statistics, and pictures as “newsworthy” bolsters the First Amendment defense to the use of this information in fantasy sports sites and potentially elsewhere. One logical extension that immediately comes to mind is use of player names, statistics and pictures on traditional gambling websites. While the use of this information in traditional gambling remains an untested area of law (and seeking specific legal advice is strongly recommended), the similarities between how athlete names, statistics, and pictures appear on these two types of sites supports extending the exception to the rights of publicity in online-fantasy sports sites to traditional gambling sites. Time will tell.

 

[1] One of the authors of this alert, Glenn Colton, drafted an amicus brief in C.B.C on behalf of the Fantasy Sports Trade Association in the C.B.C. case. 

[2] While there is room for debate, the better reading of the Eighth Circuit C.B.C. decision is that summary judgment was improper and that it is possible for a right of publicity claim to be stated. This is an academic debate as there is no question that whatever right of publicity claim could have been stated was held to be outweighed by First Amendment protections.

[3] Of course, this reasoning would not apply, for example, to an advertisement asserting that an athlete specifically endorses a particular fantasy sports site.

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