FanDuel also intends to appeal and said in a statement: We will be appealing this is only the beginning of the legal process and, perhaps more importantly, the NY legislature is already moving forward on action to ensure our game remains legal and is regulated, which we strongly support. An injunction against Draftkings and FanDuel has been levied, which means both companies are barred from accepting entry fees, “wagers or bets”, per Forbes.
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He added: “The balancing of the equities are in favour of the NYAG and the State of NY due to their interest in protecting the public, particularly those with gambling addictions”.
At the heart of the furor is the companies’ business plan: Customer pay an entry fee and can win cash based on the performance of actual players in games that take place that day or week.
The likelihood of the appeal succeeding (and the “stay” being granted) is still considered minimal by legal experts, however in the short term, the “stay” now permits DraftKings to remain open for business in one of its most important states. FanDuel and DraftKings have both said they offer games of chance, not skill, but Schneiderman has challenged that.
Former New York City deputy mayor Randy Mastro, who is also representing DraftKings, told the committee, according to WGRZ, “Daily fantasy sports games have been played openly, permissibly, honestly in New York by hundreds of thousands of fans – including some members of the Assembly”.
Schneiderman spokesman Damien LaVera, meanwhile, said the attorney general was eager to show appeals judges why they should uphold Mendez’ ruling.
Cease-and-desist letters were issued to the DFS operators in November, when Schneiderman first turned his attention to the industry with allegations that daily fantasy constituted illegal gambling.
The NBA has equity in FanDuel; MLB and the National Hockey League own equity in DraftKings. A Suffolk Superior Court judge has ordered NBX Merchant Services and Vantiv Inc.to continue taking payments until the NY case is resolved.
Schneiderman had launched an investigation into DraftKings and FanDuel in October after an “insider” scandal raised questions about the companies’ consumer protection policies and safeguards. FanDuel and DraftKings stopped operating in Nevada. NY is said to be the world’s largest market for daily fantasy sports with some estimates of over one million customers in the state.
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“There is a chance FanDuel can still succeed, but that chance is substantially less than it was before”, Nellie Drew, a sports law professor at the University of Buffalo, said in an email. A handful of other states have previously said fantasy sports amounts to gambling and isn’t allowed.
