NY is home to the highest number of daily fantasy players at 12.8 percent, so if FanDuel and DraftKings are eventually shuttered in the state for good, it would be a significant blow to their revenue stream.
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The order was signed by Justice Manuel J. Mendez of state Supreme Court’s civil division.
There was no immediate comment from FanDuel or Schneiderman’s office on the immediate stay. If a court decides that the companies’ businesses are legal, they could resume operations in the state at a later date. And there’s growing concerns that they’ve bumped up against the legal limit under federal law. The decision has the potential to ripple throughout the country as eight other states have gambling laws similar to New York’s, according to DraftKings. Much of the debate comes down to whether the games are based on chance or skill.
The New York Attorney General ignited these fireworks when it sent a cease-and-desist order to these companies last month, declaring them to be illegal gambling operations.
Each business will have 30 days to appeal Mendez’s decision and request further injunctions to operate in the state of NY until the case is finalized.
“I wouldn’t say that I am surprised”, said Marc Edelman, an Associate Professor of Law at the Zicklin School of Business, Baruch College, City University of NY, who specializes in gaming and sports law, in an interview.
“One thing a state can not do is license a sports-gambling, sports-wagering scheme”, Wallach told the State House News Service.
Lawyers for DraftKings filed a motion expressing their intentions to appeal minutes after Friday’s ruling.
It is not yet known how the decision will impact active bills in the legislature that deal with DFS in NY, with assemblyman Dean Murray having put forward a bill just this week in an effort to alter state law over DFS.
“Washington wide receiver Pierre Garcon has filed a class-action lawsuit on behalf of National Football League players against the daily fantasy sports site FanDuel, alleging it misuses players’ names and likenesses without proper licensing or permission”. An attorney for DraftKings said the company believes the “status quo should be maintained while the litigation plays out”.
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The NFL does not own equity in either daily fantasy operator, but nearly all the league’s teams have advertising partnerships with either FanDuel or DraftKings. The state Assembly held a hearing earlier this week on how to better regulate the games, and some lawmakers have introduced bills to make it legal, but overseen by the state.
