State Supreme Court Justice Manuel Mendez’s order siding with Attorney General Eric Schneiderman comes amid increasing debate about whether customers who participate in the popular online fantasy sports games are competitors or bettors.
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While New York residents can now take part in both DraftKings and FanDuel competitions, at least until a more in-depth trial and official hearing can take place, the day’s earlier ruling is an ominous one for DK, FD and the daily fantasy sports industry in the United States in general.
Schneidermans office wrote to both companies in November ordering them to cease and desist from illegally accepting wagers in New York State. The legal code also states that contests of chance can exist “notwithstanding that skill of the contestants may also be a factor”. Attorneys general across the country are investigating the firms, and lawmakers in some states have proposed legislation to ban the sites. But instead of lasting the length of a traditional football or basketball season, daily fantasy players can pick new teams every day.
On Friday, a New York judge ruled for fantasy sports shutdown in New York State regarding the top daily fantasy sports companies FanDuel and DraftKings, saying the two companies have to halt their business there.
The case only directly mentions them, and it’s not immediately clear how the ruling might affect other companies in the industry. While Collins had not yet reviewed Mendez’s order when speaking to WBFO, he criticized New York State for “hypocrisy” in going after sites such as DraftKings and FanDuel, all while the state itself is in the business of games of chance. “I have said from the beginning that my job is to enforce the law, and that is what happened today”, Schneiderman said in a statement posted to his website on Friday.
A FanDuel spokesperson added “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”.
In Washington, the gambling commission specifically concluded that fantasy sports wagering is illegal.
Darren Heitner, an attorney specializing in sports law, said that aside from the lost revenue from New Yorkers, the ruling was also a major public relations blow for the companies.
“They’re a good starting point”, Stephen Martino, a FanDuel lawyer said.
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Mendez and Schneiderman both agreed that the websites allowed betting that was based on chance and not based on the users’ skills.
