Schneiderman has called daily fantasy sports illegal gambling and filed an injunction to shutter the companies in the state.
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The DFS companies and Schneiderman will be in court on Wednesday before Justice Manuel Mendez.
The hearing is slated to begin at noon in Manhattan.
FanDuel has suspended its activities in NY pending the outcome of the court hearing. In contrast, Boston-based DraftKings hasn’t halted NY operations because it secured a restraining order from a MA judge that orders payment processors to continue working with it.
According to Schneiderman, both fantasy websites are misleading the public with deceptive advertising and violating the state’s gambling laws, while FanDuel and Draftkings argue that it’s not gambling, but a game of skill.
DraftKings, which has hired super lawyer David Boies as counsel, offered evidence from various academics who said that online daily fantasy sports competitions were not illegal online gambling but “complex games of skill”, and that entry fees were not wagers.
Schneiderman argues that the laws on the issue – a gambling provision of penal law and the state Constitution – are clear: the contests are games of chance that depend on future events that bettors can’t control and thus are in violation of the statutes.
The Democrat has called daily fantasy sports “nothing more than a rebranding of sports betting” and “plainly illegal”. “DFS contests have been played in NY since 2007, and the NYAG has never once asserted they were unlawful- until now”. In MA, the attorney general has proposed new regulations governing fantasy sports.
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DraftKings and FanDuel have responded with lawsuits attempting to stop Schneiderman’s action.
