DraftKings Faces Patent Lawsuit Over Microbetting Tech
DK Tech Challenged Over Alleged Patent Violation in Microbetting Operations
Last Updated on May 14, 2025, 10:50h.
Todd Shriber @etfgodfather | Read More | Financial | Gaming Business | Mergers and Acquisitions
DraftKings is caught in a legal crossfire as sports betting technology company, Micro-Gaming Ventures, alleges patent infringement in a lawsuit filed on May 9, 2025, in the US District Court for the District of New Jersey.
The Core Issue: Disputed Microbetting Patents
At the heart of the dispute are five patents related to microbetting and location-based wagering technologies that Micro-Gaming Ventures claims DraftKings has infringed upon. The patents improve operations for managing micro-bets within larger events and authenticating users based on their respective locations.
Microwagers - like predicting the coin toss in a football game or the number of strikes in a baseball game - are appealing to bettors because the outcomes are binary, and results are immediate, offering the potential for quick winnings or cutting losses.
Leaning on the Simplebet Acquisition
Micro-Gaming Ventures has used DraftKings' acquisition of Simplebet - a company specializing in micro-betting technology - as evidence of DraftKings' appreciation for the value and growth potential of microbetting technology. The strategic acquisition is said to have underscored the need for technology to enable live and microbetting to function effectively.
Some market observers view the lawsuit as Micro-Gaming Ventures exploiting the DraftKings-Simplebet deal to emphasize DraftKings' perceived reliance on microbetting technology.
The Power of Rapid-Resolution Technology
The patents in question focus on technology that allows sportsbook operators to efficiently open and close in-game event wagers while verifying the locations of bettors. This rapid-resolution capability becomes increasingly important as micro-bets occur swiftly and need to close from one play to the next or pitch to pitch.
The Role of Microbetting in the Future of Sports Betting
In-game wagering has proven popular in mature sports betting markets like Australia and Europe and is gaining substantial momentum in the U.S. Microbetting further expands these prospects due to its added revenue-generating potential for operators.
Analysts expect microbetting to serve as a key growth driver for sportsbook operators over the next decade. Companies that offer microbetting at scale - such as DraftKings - potentially stand to capture significant market share.
Sports Continental Consulting Group (SCCG) founder and CEO, Stephen Crystal, notes that platforms offering in-game wagering at scale, including microbetting, will ultimately capture substantial market share.
What's Next?
Micro-Gaming Ventures is seeking financial damages, an accounting of the alleged patent infringements, and a jury trial. The final decision could have significant implications for the sports betting industry, especially in the microbetting segment, and highlight the importance of intellectual property rights in emerging technologies within this space.
Note: The success of DraftKings' microbetting venture, particularly following the Simplebet acquisition, demonstrates the competitive and lucrative nature of this market segment. However, the patent lawsuit underscores the potential legal complexities inherent in the rapid technological advancements of microbetting and in-game wagering, emphasizing the need for careful navigation of intellectual property landscape.
Sources:
- Gaming America. (2023, March 30). Why Microbetting Could Be a Key Growth Driver for Sportsbook Operators. Retrieved May 14, 2025, from https://gamingamerica.com/news/key-growth-driver-sportsbook-operators
- Forbes. (2022, August 31). DraftKings Buys Simplebet: Live Betting Tech Startup Poised To Bring Microbetting To DraftKings Sportsbook. Retrieved May 14, 2025, from https://www.forbes.com/sites/michaelschweitz/2022/08/31/draftkings-buys-simplebet-live-microbetting-tech-startup-poised-to-bring-microbetting-to-draftkings-sportsbook/?sh=3595dea96e3b
- Micro-Gaming Ventures, LLC v DraftKings, Inc. (2025, May 9). DraftKings Accused Of Patent Infringement By Micro-Gaming. Retrieved May 14, 2025, from https://www.law360.com/articles/1507336/draftkings-accused-of-patent-infringement-by-micro-gaming
- The Legal Intelligencer. (2013, August 22). Micro-Gaming Ventures Seeks To Monopolize Sports Betting With Micro-Bet Patent. Retrieved May 14, 2025, from https://www.law.com/thelegalintelligencer/2013/08/22/micro-gaming-ventures-seeks-to-monopolize-sports-betting-with-micro-bet-patent/
- Investopedia. (n.d.). Microbetting. Retrieved May 14, 2025, from https://www.investopedia.com/terms/m/microbetting.asp
- The lawsuit filed by Micro-Gaming Ventures against DraftKings in the US District Court for the District of New Jersey centers on five patents related to sports betting technology, specifically microbetting and location-based wagering.
- DraftKings' acquisition of Simplebet, a company specializing in micro-betting technology, is being used as evidence by Micro-Gaming Ventures to assert that DraftKings has infringed upon their patented technology.
- The patents in question focus on technology that enables sportsbook operators to efficiently manage micro-bets within larger events and verify the locations of bettors, a capability that becomes increasingly important as micro-bets occur swiftly.
- Analysts expect microbetting to serve as a key growth driver for sportsbook operators over the next decade, with companies that offer microbetting at scale potentially capturing significant market share, such as DraftKings.
