The Attorney General told the two companies that their operations were considered gambling, which is illegal in NY.
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“The Attorney General’s actions constitute a shocking overreach. As a result, we intend to continue operating in NY”, DraftKings said.
NY Supreme Court Judge Manuel Mendez will hear arguments on the government’s request to shut them down in the state on November 25.
The finding by Attorney General Eric Schneiderman that the sites are gambling, rather than games of skill, could shut the sites out of a key market and start a domino effect in other states.
The cease-and-desist letter was also sent to FanDuel, another major daily fantasy sports site.
The company said it has not seen significant spikes in withdrawals since the attorney general’s order. As anyone with a TV knows, those days are long gone-daily fantasy games like DraftKings and FanDuel now dominate.
FanDuel generated revenue of $57.3m for the full year 2014, more than four times the $14.2m generated the previous year, while DraftKings annual revenue ascended from $4m to $30m for the same period.
“We’ve only warned the two companies that we believe are online gambling”, he said. But skill-based games were exempt. Ortiz’ bill would require the state Gaming Commission to regulate fantasy sports. Last week, he ordered DraftKings and rival site FanDuel to quit letting New Yorkers play and warned he plans to go after the companies with a civil suit.
“I’m not easily shocked, but this has been a shocking, irresponsible, irrational and illegal rush to judgment”, DraftKings lawyer Randy Mastro said in court.
“They are so extreme that they led a MA court, just last Friday, to issue a temporary restraining order permitting a DraftKings payment processor to continue its services in the face of threats from the Attorney General”, the company stated.
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Remember when “fantasy sports” involved an office pool into which everyone threw $20?
