Steven Jacobs, aka Stevesbets (and also a sometimes PFA Radio listener) involved in major lawsuit/controversy with DraftKings and famed sportsbettor "Spanky"

[Dan Druff]

Stevesbets, real name Steven Jacobs, was a well known online poker pro in the 2000s who was famous for his crazy outburts in the Pokerstars chats. He seemed to have exited or mostly exited the poker world in the 2010s, and started a law practice in New York.

Stevesbets and I always got along, but we were never friends. I will admit I hadn't thought of him in many years, but in 2021 he contacted me regarding appearing on his podcast called "The Bettors Verdict". He wanted me to discuss Mike Postle's (unsuccessful) lawsuit against me, and I agreed to go on. You can listen to the episode here.

Unbeknownst to me, after my appearance on his show, Steven started listening to PFA Radio. He told me that he enjoyed the show and was listening regularly, which was nice to hear.

We e-mailed on occasion, and I last heard from him in March 2024.

I was quite surprised today to wake up to texts about Jacobs being the primary figure involved in a major controversy/lawsuit involving both DraftKings and famed sportsbettor "Spanky" (real name Gadoon Kyrollos).


It's a complicated story, so bear with me. I'm still trying to make sense of the whole thing.

I'll try to explain in the next few posts.

[Dan Druff]

On March 11, 2024, a lawsuit was filed in federal court against DraftKings. It was filed on behalf of a "John Doe" (anonymous plaintiff), and the attorney for the plaintiff was Steven Jacobs.

You can read the complaint here: https://resources.sbcamericas.com/sb...514156.1.1.pdf

Thanks to longtime gambling industry figure Jess Welman for finding the complaint, publishing it above, and analyzing it on the website where she writes.


The March 2024 lawsuit alleged that DraftKings gave out John Doe's real information to influential gambling figure "Spanky", who had been threatening Doe. It alleges that Spanky threatened Doe that he would use DraftKings to find him, Doe made contact with a VIP Host at DraftKings to make sure that didn't happen, and then it occurred anyway. Doe claims that a masked man confronted him on the street outside his apartment, and demanded he pay $500,000 which Spanky claims to be owed.

It is now assumed that John Doe is really Steven Jacobs, and he was representing himself in this lawsuit.



But let's go back a bit further. Why does Spanky feel that he's owed $500,000 from Jacobs?

For that you'd need to see another lawsuit, this one also involving Jacobs. However, this lawsuit is from April 2023, and Jacobs is the defendant. Once again, it was acquired by Jess Welman, and you can find it here: https://resources.sbcamericas.com/sb...-Complaint.pdf

Who is the plaintiff in the April 2023 suit? It's a man named Oscar Jones. Jones alleged in the suit that he was funding Jacobs' DraftKings account, in exchange for a piece of the action. However, despite the DraftKings venture being successful, Jones alleges that Jacobs never paid him, and kept making excuses regarding difficulties withdrawing the money. Jones also alleges that Jacobs filed a false complaint to the NY Gaming Commission regarding his stuck funds, and then rescinded the complaint immediately afterward, claiming it was sent in error. Jones theorizes that Jacobs did this in order to make it appear he filed a real complaint (to further stall Jones), and then quietly withdrew it.

So did Jones win his lawsuit?

Strangely, not only did Jones lose, he lost the countersuit as well!

At some point, Jones signed an agreement not to sue Jacobs. Jones claimed he was legally browbeaten into signing it, with Jacobs threatening to ruin him through the legal system. However, the fact is that Jones did sign an agreement to never sue Jacobs over this matter, and agreed to a $250,000 penalty for doing so.

Given that the contract was legally binding and determined not to have been signed under duress, Jones not only had his suit against Jacobs dismissed, but was ordered to pay Jacobs $250,000!



So where does Spanky fit into all this? Read on....

[Dan Druff]

Spanky, aka Gadoon Kyrollos, is one of the best known modern professional sportsbettors. He has a large Twitter following, as well.

In the John Doe lawsuit, it is alleged that Jones is an associate of Spanky's, and that was the reason Spanky took an interest in the matter. It was Spanky's money being funneled through Jones into Jacobs' account. Jones was likely the middleman because he is not known, and DraftKings would not be suspicious that the account was being used by a professional betting syndicate (all of this is legal, btw, and referred to as "bearding"). Spanky himself had already been banned or limited from DraftKings for being too skilled.

In any case, Spanky felt the money was owed to him, and seemed to have put substantial pressure on Jacobs. According to the Doe lawsuit, Spanky was threatening that he knew "dangerous people" and that he would use his contacts at DraftKings to come up with Jacobs' address. The suit claims that, despite Jacobs making his best effort to have DraftKings protect his account from Spanky, his address was acquired anyway, and his VIP Host admitted it was through them.

At 5:32pm PDT today (about 30 minutes ago). Spanky dropped the following statement on Twitter:

My statement:
Let’s address Mr. ‘John Doe’ aka Steve Jacobs (Yes, you read that right, the plaintiff and the plaintiff’s attorney are the same person!)

Plaintiff / plaintiff's attorney Steve Jacobs is also a Senior Attorney who works at Herbert Smith Freehills Law Firm in New York City.

As background, my buddy Oscar Jones met Steve through a personal connection and was under the impression that Steve was a "whale" that we believed we could flip to get down.

In layman's terms, a "whale" is a losing player that can bet big on all of our behalf because the sportsbook, seeing his history of losing bets, has given him increased betting limits, hoping he will lose even more.

We would send Oscar the plays, Oscar would send them to Steve Jacobs and Steve Jacobs would then punch them in his account. (For those unaware of the betting landscape, I rely on guys like Steve Jacobs to bet, given DraftKings (DK) doesn’t allow me to bet at their establishment because I win). Oscar even gave Steve $82,375 of his own money to get the partnership started.

After a few months, and with the benefit of our consultation (via Oscar), naturally Steve won a substantial amount of money.

Fast forward 2 months to when it's time to settle up the proceeds of our partnership. Slight problem – Steve claimed DK was holding up the payout. He claimed that DK was asking him to sign an “affidavit of eligibility”. Oscar and I each advised him to file a complaint with the New York Gaming Board. Initially he refused, but we were insistent that he take up the matter with the regulatory authorities, and eventually he agreed to do that.

On February 6, 2023 at 8:33p Steve filed a complaint with NY Gaming via email and BCC’d Oscar on that email to “prove” he’d filed it.

For more than a month after that, Steve told us both that he had not yet received a response to the complaint he filed with regulators, and that he was still waiting with "fingers crossed".

Oscar and I both started to get suspicious.

My strategy of following up on my suspicion was a test for Steve Jacobs. I told him -- bluffing -- that I had the ability to receive information on the status of the payout from DK (I obviously do not have that power, nor am I connected with anyone who does have that power, given I am banned from betting at DK!). I wanted to gauge Steve's response to my bluff; in particular, I was hopeful that if he was doing something wrong, that this bluff might encourage him to fess up. Steve maintained that DK was holding up his withdrawal request, and that he was waiting on a response to a complaint he filed with the New York Gaming Board.

Oscar then had a brilliant strategy for following up on our suspicion; he had the idea to use New York's Freedom of Information Law (FOIL) to request, from the regulators, copies of the complaint that Steve Jacobs said he had filed against DK. What comes next is crazy! What Steve Jacobs never admitted to us was literally 5 minutes after filing the complaint, he sent them a second email at 8:38 pm on February 6, 2023 saying that the complaint he "filed" in his first email was an "accident". 5 minutes!

In his "accident" letter, he apologized - saying he was a "gaming lawyer and drafted it for a gaming training module”. Both the complaint and cancellation can be seen attached below and can be freely obtained via FOIL.

I believe one of three things happened: Either 1) Steve Jacobs wound up stealing the money, or (2) he gambled it all away or (3) he just booked our bets himself (instead of placing the bets at DK) - hoping we would lose.

The evidence seems to show that Steve Jacobs is either a sick compulsive gambler or a thief. My bet is on both. Either way he needs help.

I wound up talking to Steve Jacobs and he admitted to me that he owes over a million dollars ($1,000,000.00) to other people. He has a reputation in the poker community of being unhinged

Although he never told me what happened with our winnings, which were supposedly being withheld after he tried to withdraw them in January of 2023, he did manage to, in March of 2023, settle another lawsuit against him, by paying plaintiff Jonathan Bronson $270,814. Steve Jacobs is involved in several lawsuits for hundreds of thousands of dollars, on both sides (but especially on the Defendant side), as John Doe in many of them. You've all heard of robbing Peter to pay Paul; this guy robbed Spanky to pay Johnny.

What a mess.

Steve Jacobs is now seeking compensation by way of a frivolous lawsuit against DraftKings - to either pay off other debts or to keep gambling. He claims this incident happened in March 2023 but yet he waited till June 2024 to file a suit? 15 months! Did he run out of money to feed his gambling habit?

I never threatened Steve nor sent a “masked man” to threaten him; however, given that Steve Jacobs owes over a million dollars ($1,000,000.00) to so many people, his claims don’t surprise me.

I never received any information from anyone at DraftKings about Steve Jacobs. FOIL was all we needed to prove this guy to be a shyster.

Sorry Steve Jacobs, but “John Doe” ain’t gonna cut it this time. You wanna try and steal money from people to feed your gambling habit and then play the victim? You want to smear my name and Oscar’s name and DraftKings' name? All while remaining anonymous!?! You use your lawyer badge to tie up the court’s valuable time instead of seeking the help you desperately need. Steve Jacobs is a complete loser!

To @HSFlegal, you have a bad apple in your midst. Can you expect him to represent your clients while his mind is preoccupied with whether the Yankees will win by at least 2 runs or how he will find funds to feed his gambling habit? His behavior seems to be that of a professional con artist.

To my fellow bettors out there: there is a lesson to be learned here; be careful of who you deal with. Do your due diligence. Be wary of being too trusting based on appearances, because this case teaches us that even people who appear like they should be highly credible and highly trustworthy (e.g. Steve Jacobs, a high powered officer of the court /New York attorney for Herbert Smith Freehills) can turn out to be a con-man, a liar, and a thief.

Like I’ve always said, as a professional sports bettor, winning is just the beginning. Scum like this are everywhere you look. You do your best to try and avoid them but they always seep through.

Thanks for reading ��

Embedded Tweet

https://twitter.com/spanky/status/1805761061062107165

[Dan Druff]

Interestingly, between October 2023 and March 2024, I received some communications from Jacobs regarding his DraftKings account. I will not reveal those communications because they're private. However, I can tell you that none of them mentioned Spanky, Oscar Jones, or anything else in that situation. The conversation died out, I think because I forgot to respond to one of the emails, so I haven't communicated with him in 3 months.

But now I am very curious what he wanted to talk to me about. He gave a general description, and it involved DraftKings, but it was confusing.


What do I think of Spanky's statement?

There's a good chance that it's true or mostly true. Indeed, there is no proof that a masked man showed up in front of Jacobs' apartment building, nor is there proof the masked man was there on behalf of Spanky.

However, I am also hearing that Spanky "is not a good guy" and that the DraftKings story is very plausible. It is not at all unreasonable to believe that Spanky might have obtained Jacobs' address through DraftKings if he felt he was scammed out of $500,000, and it's also not unreasonable that he might have sent someone over to intimidate Jacobs into paying (without doing anything illegal such as assaulting him).

Is it possible that Jacobs is a degen with a major -EV gambling problem, and ended up using Spanky's money to fund his habit? Yes. It's very possible, and he wouldn't be the first. In fact, something very similar was alleged by Haralabob Voulgaris against Tom Dwan, earlier this year. That also involved sportsbetting bearding.


How could this have occurred in the first place?

It is very hard for winning sportsbettors to find big, consistent action at sportsbooks. They get banned or limited as soon as it's seen that they're reliably winning and placing bets on the sharp side. This is where bearding comes in. Longtime losing whale sportsbettors are found (or ones assumed to be whales, like Dwan), and the pro sportsbettor puts up the money to fund the whale's account. Then winning picks are fed to them and they're told to fire at high limits, and the book has no choice but to pay out winnings, even if the bearding scheme is discovered. This is because bearding is not against the law -- it's simply the practice of funding someone else's sportsbetting and giving them picks.

Spanky claims that his buddy Oscar Jones learned of Steve Jacobs' degen history on DraftKings and the fact that he's down huge. This made him the perfect whale, according to Spanky, and thus the partnership was formed.


Will be interesting to see how this shakes out.

[Cerveza Fria]

So, Steven Jacobs was Spanky's Interpreter?

[Dan Druff]

Did radio segment on it. Go to 3:20:20 mark below:

[Dan Druff]

BUMP

This was just posted by Spanky:





Jacobs comes off really badly in this clip.

Oscar Jones unsurprisingly won his appeal here at the higher court.

The case goes back to the lower courts now.

Pretty amazing that Jacobs is trying to argue to the higher court that case law exists to uphold agreements signed upon false pretenses.

[Dan Druff]

I like to be complete and cover all bases on this site, and I always feel a little bit funny about posting heavily edited videos, or clips which may or may not be out of context.

Thinking about this case recently, I did notice that the clip Spanky posted above was weird. It was short, it didn't have a natural starting point, it had jumps (as if parts were cut), and it abruptly ended in an unnatural spot.

I decided to take a look at the actual full appeal. I found it, so you can look, too. See the below video, starting at the 1:26:35 mark. The portion where the clip was taken begins around the 1:33:00 mark, but you should watch the entire thing starting at 1:26:35 for context.

[Dan Druff]

So yeah, Spanky did edited out two parts which made his side look a little bit worse. One edit was Jacobs' claim that he did what he did because Spanky was a dangerous person who sent people to his apartment to threaten him. The second part cut was Jacobs stating that the text messages from Oscar contradict some of Oscar's claims.

Interesting that these two parts were cut out, and not the best look.

I will say that this doesn't really change the way I see things. The basic facts of the case, from what I can see:

1) Oscar Jones gave Jacobs $82k (presumably Spanky's money) to gamble on Draftkings, and Jacobs was instructed to use their picks

2) Using those picks, the account was run up to over $450k

3) When Jones came calling for the money, Jacobs claimed Draftkings was locking the money and he couldn't access it

4) Jacobs filed a complaint with NY Gaming. Jacobs then got Jones to sign a release where Jacobs wouldn't be sued, or face a $250k penalty for doing so. Jacobs allegedly threatened to withdraw the complaint if Jones didn't sign the release. Jones then signed it.

5) In reality, Jacobs had already withdrawn the complaint minutes after filing it, saying it was submitted in error.

6) Jones never got the money he was promised in the first place -- basically half the profits, plus the seed money.

7) Jacobs says a masked man showed up in front of his building and threatened him, regarding the matter. Jacobs also claims that Spanky used a contact at Draftkings to get Jacobs' address, even after Jacobs had begged Draftkings to keep his info private.


I can believe that Spanky really did get Jacobs' address from a friend at Draftkings, and that someone very possibly could have come down and attempted to rattle Jacobs. (Note that Jacobs does not allege that the masked man hit him, harmed him, or brandished a weapon -- only that threats were made.)

At the same time, I believe that Jacobs did stiff Jones/Spanky, and probably chunked off the funds while doing degen gambling which he wasn't authorized to do.

I can't tell you who is right and who is wrong from the legal standpoint (especially because I know zero about NY law), but I can tell you that from what I see here, Jacobs DOES morally money the money to Jones/Spanky, and should pay up -- or at least start making payments.

[Dan Druff]

Also, from what I can see, Oscar Jones withdrew his lawsuit in February.




Maybe Jones/Spanky didn't want certain details about their operation to come out in discovery.

Weird.