The state of NY on Tuesday followed in Nevada’s footsteps when its attorney general determined that the two leading daily fantasy sports companies are gambling operations, but the fallout of that decision seems notably more intense than it has been in the Silver State.
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However, after the NY attorney general sent those same companies a “cease and desist” notice this week telling them their product was gambling and they needed to stop “illegally accepting wagers” in NY, their reaction was a bit different.
FanDuel and DraftKings contend their daily contests are legal because they are based on skill, not chance, but Schneiderman concluded the opposite.
It’s now legal in most states because a series of court decisions and a 63-word provision of federal law that classify fantasy sports as a game of skill. “We will pursue this fight to the fullest to ensure that NY fantasy sports fans do not need to stop playing the games they love”.
“If they have to, if they saying it’s illegal, it’s illegal there has to be something that will cause them to get to that point”, one said. Questioned about the leagues’ responsibility regarding daily fantasy, a spokesman in the NY attorney general’s office declined to comment, but did not rule out that it was an area of focus in the investigation.
Schneiderman’s cease and desist letters state the companies have five days to respond and offer their arguments against the state ruling.
Draft Kings has already sent an email to its registered players asking them to contact the attorney general themselves, encouraging them to “protect their rights” to keep playing daily fantasy sports.
“If it’s a game of skill, like online poker, they don’t seem to be bothering that group”, he said.
He stated: “Daily fantasy sports is neither victimless nor harmless”. “If laws change, then we’d certainly comply”.
Both DraftKings and FanDuel have rocketed to be among the top NFL TV advertisers – spending millions. The attorney general contends daily fantasy sports, known as DFS, contests are a form of illegal gambling, which is outlawed by the state constitution.
The event’s lineup includes the premiere of “Perfect Lineup”, a documentary about daily fantasy sports.
One of Scotland’s fastest growing tech firms has been delivered a blow by regulators in NY.
They have been at the center of controversy since early October when a DraftKings employee won $350,000 from a $25 entry in an American football contest on the rival FanDuel site.
“We are still reviewing the bill”, said Paul Charchian, the association president. To do that, it would have to prove that the games don’t have a “material element of chance”.
In addition, the attorney general’s investigation found that both companies “consistently” use deceptive advertising to lure consumers into an “unregulated”, online gambling operation that, while marketed as a game that “anyone can win”, distributes the “vast majority” of winnings to a “small subset of experienced, highly sophisticated players”.
FanDuel and DraftKings continue to argue against Schneiderman’s assertion that daily fantasy involves chance and not skill.
FanDuel said it plans to fight back with everything in our arsenal.
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DraftKings and FanDuel have both retained Washington lobbyists – Steptoe & Johnson for FanDuel and Morgan Lewis & Bockius for DraftKings, according to Reuters – and FanDuel has hired former federal prosecutor Sharon Levin of Wilmer Cutler Pickering Hale & Dorr to litigate against the NY ban.
