Corporate Espionage Drama Between DraftKings and Ex-Employee Continues

The situation between DraftKings and its former head of the company's VIP program, Michael Hermalyn, has escalated. The betting company announced it had discovered additional evidence supporting its corporate espionage accusations.

Early in February, Hermalyn filed a lawsuit against DraftKings for allegedly breaching his employment agreement through illegal post-employment restrictions, demanding $310,604 in legal fees.
Conversely, DraftKings accused Hermalyn of attempting to “steal and use confidential information.” Acting on the claim, District Judge Julia E. Kobick issued a temporary restraining order against him.

DraftKings' VIP Programme the Center of Attention

The controversy began when Hermalyn sought to leave DraftKings to join Fanatics VIP. According to DraftKings, this was part of a larger plan by Fanatics to replicate DraftKings' successful VIP program.

DraftKings alleges that Hermalyn:

• Downloaded confidential documents to his personal devices.

• Deleted evidence connecting him to corporate espionage.

• Received a multi-million-dollar compensation offer from Fanatics VIP.

The company presented supporting materials, including:

• Forensic investigations of company laptops.

• Affidavits from other employees.

• Deposition testimony confirming his misconduct.

DraftKings contends these actions show Hermalyn’s disregard for his contractual and legal obligations.
Meanwhile, Hermalyn argues that his termination was unlawful and intended to block his court appeal and sabotage his transition to Fanatics VIP. He is now seeking to void the non-compete provisions in his former contract.

Not the First Corporate Espionage Scandal This Year

Judge Julia E. Kobick ruled that Hermalyn could remain at Fanatics VIP but must not disclose DraftKings’ confidential information or solicit its employees. Following this, both parties claimed victory.

Later reports accused Hermalyn of unwanted physical contact with a female employee—allegations that a Fanatics source dismissed as “sour grapes.”

Similar corporate espionage issues have surfaced recently:

• In January, a former OnAir Entertainment employee alleged a multi-year spying campaign targeting Playtech.

• OnAir reportedly monitored Playtech’s systems for two years, gaining early insight into new releases.

• Playtech has confirmed awareness of the accusations and launched an internal investigation.

As the iGaming industry continues to expand rapidly, competition between major players intensifies. All eyes now remain on the unfolding DraftKings case — and whether more scandals will soon surface.