The Key Issues in RJ Bell's Lawsuit Against Deadspin

The Key Issues in RJ Bell's Lawsuit Against Deadspin

Media

The Key Issues in RJ Bell's Lawsuit Against Deadspin

RJ Bell, the founder of Pregame.com and a prolific commentator on gambling in sports media, is heading toward a legal showdown with Deadspin over a story published about him last year.

Bell filed a $10 million defamation lawsuit against Deadspin parent company Gizmodo Media Group (which is now owned by Univision), author Ryan Goldberg, and up to 20 John Does in New York last week. In the suit, which was first reported by Awful Announcing and can be read in full here, Bell is represented by Charles Harder, the attorney for Hulk Hogan who, funded by the billionaire Peter Thiel, sent Gawker Media into bankruptcy.

Bell’s lawsuit stems from a story that Deadspin published last June entitled How America’s Favorite Sports Betting Expert Turned A Sucker’s Game Into An Industry. The author, Ryan Goldberg, is a freelancer and the piece is one of three stories he wrote for Deadspin. He said in the story that he spent a year investigating the piece.

Bell’s complaint alleges that “false and defamatory statements about Plaintiffs have caused tremendous harm to Plaintiffs’ personal and professional reputation, including the hard-earned trust they have with their customers, the high standing they have with the media, and their actual and potential economic interests.”

According to Steven Mandell, a partner at the Chicago-based law firm Mandell Menkes, which represents media companies in cases like these, the burden of proof in a defamation suit is very high.

“Generally, you have to prove a false statement of a material fact that was published that led to his damages,” Mandell told The Big Lead by phone. “One thing that’s significant here is that everyone ought to conclude that Bell is a public figure. He certainly sought the limelight. His own complaint claims that he’s been on various television shows and web sites. That has extreme significance in this case because it means that the plaintiffs will not only have to show that what was said was a false statement of fact, but they’ll also have to show actual malice on the part of the author and the publisher.”

“What that means is they’ll have to show not only was it false, but they knew it was false — or at the very least, that they had serious doubts about it — prior to publication,” Mandell continued. “That’s a heavy burden to meet. That means failure to investigate, or negligence, or sloppy reporting doesn’t meet that test. It’s a subjective test — getting into the head of the author, the editor, or the publisher — and determining, ‘Did they publish this knowing it was false?’ This suit is filed in the state of New York. Generally, New York law is going to be more friendly to media defendants than Florida law. This is a general statement, but I would expect a New York state court judge to be more friendly to the author and the publisher than my understanding of how the Florida state court judge treated the Gawker defendants.”

The most serious allegations in the story were that Pregame, a site which in part sells picks from bettors who are labeled as experts, benefited from customer losses in the form of commissioned kickbacks from sportsbooks. In the story, Deadspin cited an anonymous oddsmaker in discussing the alleged kickback scheme:

One oddsmaker who has been employed by at least two sportsbooks that had arrangements with Pregame explains how it works: “You bring the client in, you’ll get all the action they do.”
It’s a can’t-miss business plan, and it pays off twice. First when customers buy the picks, and again when they fork over their money to sportsbooks on those losing bets. This might explain why Pregame is so generous with discounts like “bulk dollars” and half-price coupons, and why Bell trumpets the savings of subscriptions over single-game purchases. Pregame has every incentive to keep buyers in the fold, and keep them betting.

An apparently separate unnamed oddsmaker was similarly quoted:

“Being an affiliate and a good one can be very profitable,” an oddsmaker at a major offshore sportsbook that had an arrangement with Pregame told me. “You don’t have to do anything. Just watch the money roll in. While Bell’s asleep he’s still making money.”

According to that oddsmaker and the websites of several sportsbooks, affiliates are sometimes given the choice between a commission based on net losses, or based on the referred customer’s first deposit. If tout services knew their customers were winning, the smart choice would be the one-time deposit, instead of one tied to losing. The oddsmaker said he has never seen touts choose the deposit.

In the recently-filed complaint, Bell categorically denies this type of arrangement:

“The facts are: Plaintiffs have had no financial dealings with any online sportsbook since 2008. Plaintiffs receive no advertising revenue from any sportsbook and no revenue based upon a percentage of bettors’ losses. Moreover, in an abundance of caution and to avoid even the perception of having any misaligned interests with its customers, Plaintiffs have not received any revenue to promote any website that promotes sportsbooks in the last five years.”

In its original story, Deadspin included this statement Bell made on a Pregame message board in 2015: “Pregame.com has ZERO financial dealings with ANY online sportsbook. Neither do I personally. Not a penny. That is UNIQUE among the major sites – meaning Pregame is the only major industry site that doesn’t have to choose between offending an online SB advertiser and telling the truth. It’s very important to me to remain independent – independent from online sportsbooks and independent from parent companies (with their own financial deals) dictating reporting.”

I asked Mandell, the media attorney, what we could infer from these opposing claims. “The plaintiffs are Pregame LLC and RJ Bell,” Mandell said. “If it turns out that RJ Bell has another company, or there’s another company that’s an affiliate of Pregame LLC, through which those transactions had run, Deadspin might take the position that even though it was not technically or literally true what they said, it’s certainly substantially true. It’s difficult to know just by reading the article and the complaint.”

“One of the consequences of filing a defamation suit is that you are opening yourself up to further investigation in the form of subpoenas and requests for information through the discovery process,” he continued. “So, while I can’t sit here and say what the author’s actual information is, or Pregame or Bell’s for that matter, certainly one would expect the lawsuit to open up that information for scrutiny.”

Furthermore, in its original story, Deadspin alleged that Pregame “funneled” referrals through an offshore sportsbook called PregameAction and later Sharpbettor.ag, which were operated by a Canadian-registered company called Big Juice Media. An update after the story was published said that Bell emailed, “after publication,” denying that he “runs” these sportsbook referral sites.

In the complaint, Bell’s attorney states that, prior to publication, a Pregame executive emailed Goldberg an on-record statement “to address the particularly egregious false claim that Plaintiffs owned or possessed operational control over PregameAction.com.”

Goldberg and Deadspin declined to engage Bell on background prior to publication of the story. Another point of contention in Bell’s complaint includes the assertion that graphs in Deadspin’s piece, which purported to illustrate major losses if you followed all of Pregame’s advice, “are the result of clear errors in calculation and a gross exaggeration of Pregame’s expenses in nearly all cases by over 100% (double), and sometimes by as much as 2000%.”

The attorney Charles Harder sent a threatening letter about the Bell piece, which was covered by Gawker.com last July, in the context of an explanation from its legal team about its refusal to retract and/or apologize for the story. After it acquired the sites that were formerly a part of Gawker Media, Univision removed six stories, including three that were on Deadspin, that were the subject of pending litigation. In deciding not to retract this story when the others were taken down, Univision was sending a clear sign that its legal team did not believe the story represented a liability.

The author Ryan Goldberg did not respond to an email seeking comment. Deadspin editor-in-chief Tim Marchman forwarded me to parent group publicist David Ford, who replied on Monday: “We have now been served. We are reviewing the complaint and have no further comment at this time​.”

Bell sent The Big Lead the following statement on Friday:

Pregame.com, the largest American digital media organization comprehensively covering Las Vegas news and odds, considers sacred the protections provided by the U.S. Constitution to the practice of journalism.

It’s my related belief that any journalist who maliciously lies must be held responsible. Not only because punishment is just in such cases, but more importantly because such disregard for journalist standards places the future rights of honest journalists at risk.

A trustworthy press is more important than any individual – and is also more important than any aggrieved party receiving full financial satisfaction. I strongly believe that – even if that aggrieved party is me and my company. Thus, all monies received by Pregame personally from the author of the disputed Story (as a result of Pregame’s libel and defamation compliant filed in the Supreme Court for the State of New York) will be 100% applied to the creation of scholarships for journalism students attending the University of Nevada, Las Vegas.

In a tweet on Friday, Bell clarified the last sentence: “I’m comfortable with financial satisfaction from a corporation. With an individual, the symbolism of his mistakes helping others learn felt right.”

Bell declined by email to discuss any further specifics of the case, including whether it was being funded by Peter Thiel. He emailed The Big Lead a statement, which was also sent to Awful Announcing when they asked that question: “I have a great deal to say about Deadspin’s disregard for the truth. But, that will have to wait. The legal system makes candor concerning an ongoing case too risky. Because of this reality, when it comes to commenting on any specifics related to our $10 Million case against the Defendants, I’m forced to let our publicly available 18-page complaint speak for itself.”

In response to the general question raised by the attorney Steven Mandell, about whether Bell has ownership in any intermediaries that receive money from sportsbooks, Bell emailed the following statement:

Pregame LLC  (nor myself personally; nor any company I have or had ownership interest in; nor any company I have or had received a share of profits from; nor any company I have or had operational control of) has not received any monies from online sportsbooks since 2008.

Pregame LLC (nor myself personally; nor any company I have or had ownership interest in; nor any company I have or had received a share of profits from; nor any company I have or had operational control of) has not received any monies from any website(s) which promote online sportsbooks since 2012.

Stay tuned for any further developments in this case.

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