“This immediate stay was granted, so we will remain fully operational in New York”, DraftKings legal counsel David Boies, Chairman of the Boies, Schiller & Flexner law firm, said in a statement.
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On Friday, as reported by USA Today, New York judge Manuel Mendez granted the state’s injunction requests to ban both daily fantasy sports sites from doing business in New York.
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In October, the Navada Gaming Control Board and the state’s attorney general determined that daily fantasy sites should be defined as sports gambling and need a license to operate in that state. Both filed court actions objecting to Schneiderman’s order, arguing that fantasy sports is a game of skill specifically allowed under the federal law that prohibits other forms of online gambling.
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Both companies responded by banning their employees from playing in daily fantasy leagues, along with creating advisory boards to help them sort through legal matters. He says he’s pleased with the court decision.
But DraftKings and FanDuel said they were blindsided by the cease-and-desist letters last month, contending Schneiderman’s office never indicated that it was looking into the legality of their contests.
For FanDuel, this means re-entering NY after pulling all business there in mid-November despite the fact that its headquarters are right in the city.
Messages seeking comment from Boston-based DraftKings and New York-based FanDuel were not immediately returned.
The UIGEA language exempting fantasy sports has no corresponding authority under New York State law as now written, he said.
Attorneys for the DFS companies immediately appealed and were successful in obtaining a stay of the Supreme Court order.
The decision is a win – albeit a temporary one – for the companies, which have been fighting New York Attorney General Eric Schneiderman’s claims that the sites violate the state’s gambling laws.
It’s been a rollercoaster ride of a day for the leaders in the daily fantasy sports industry. The companies have said they’re contests are games of skill, not chance.
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“Fantasy sports teaches us that you’re only as good as the team around you, and we are, as always, honored to have you on our team”, FanDuel wrote on its website to its users.
