After receiving bad news on Friday morning from the New York Supreme Court (that they could not continue operating in the state until a wider court case was resolved), DraftKings, FanDuel and the daily fantasy industry have been granted a stay after appealing the preliminary injunction.
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Schneiderman ordered FanDuel and DraftKings to cease doing business in the state of ny in November, on the basis of illegal gambling under the guise of game playing.
Meanwhile, Congressman Chris Collins – a critic of Schneiderman’s effort to bar such games in New York State – expressed his disappointment in the judge’s decision.
Attorneys for the DFS companies immediately appealed and were successful in obtaining a stay of the Supreme Court order.
“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. “We look forward to continuing that conversation”, DraftKings said.
Most states have no laws that specifically address fantasy sports but do have gambling laws that might dictate whether they’re legal.
In an hour-long hearing later, the daily fantasy operators made their case for a stay before state appellate Judge Paul Feinman.
While New York’s DFS fans protested on the streets, both sites launched legal action against the AG’s office in order to challenge the opinion and protect their business in the state.
There are at least 600,000 New Yorkers who play daily fantasy on DraftKings and FanDuel and their combined entry fees in 2015 added up to more than $200 million, according to ESPN. “Daily Fantasy Sports contests have been played legally by New Yorkers for the past seven years and we believe this status quo should be maintained while the litigation plays out”.
The matter is far from over, however, with Justice Manuel Mendez noting the injunction “does not constitute a determination of the ultimate issue”.
FanDuel stopped offering daily fantasy sports contests last month after Schneiderman opened legal proceedings against the company.
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The attorney general has said that while the games can involve some skill, that doesn’t make them legal because ultimately how customers fare depends on events out of their control, such as professional athletes’ injuries, weather or even blown calls.
