According to Sali, the current battle between DFS companies and the Attorney General is a tricky one to understand.
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“The bank defendants are in the business of loaning money that was and continues to be used by their recipients, such as plaintiff, for placing bets through the illegal gambling schemes created and operated by FanDuel and DraftKings”.
“That doesn’t happen when players can not influence the outcome”, he said.
“If the judge were to grant the attorney general’s motion for a preliminary injunction, which I obviously hope he doesn’t do, I think we would have to very seriously consider an immediate appeal of that”, said David Boies, a DraftKings attorney, during a teleconference with reporters yesterday.
The fantasy sports industry seems resigned to a few level of regulation, including rules mandating the segregation of customer accounts, protection of customer financial data and barriers against underage players. Daily fantasy sports companies have argued that they are legal under UIGEA because of an exception for games of skill.
Fantasy sports companies argue that their games should not be considered gambling because they involve more skill than luck, and were legally sanctioned by a 2006 federal law put in place to exempt fantasy sports from a ban on online financial wagering.
By the winter, the Attorney General wants new regulations in effect that would regulate websites like DraftKings and FanDuel. But once the rosters lock and the games begin, their performance is left to chance.
In the Daily News piece, Schneiderman wrote: “That’s why more than 89 percent of one site’s players are losers, despite seemingly endless TV ads promising easy money”.
NBC Sports, which includes Golf Channel, has an equity stake in FanDuel. “If you’re playing Hold’em and the first two cards you receive are aces and the other person’s are a two and a six, that other person could have all the skill in the world, but is probably not going to beat you”, he explained.
In making the distinction between “traditional” season long fantasy sports and daily contests, the attorney general makes the argument that DFS contests are outside the user’s control, pushing the debate away from whether or not DFS are games of skill. Statistically, this play would cost the quarterback one yard – a yard that could make the difference between someone on DraftKings or FanDuel winning or losing tens of thousands of dollars. But clearly, a message needs to be sent that this is not appropriate advertising for college sports.
“That is absolute proof that this is a game of skill and not chance”, he said. “Just because it’s gambling doesn’t make it illegal”, Healy told MassLive on November 11. But poker never recovered from the crackdown, largely because the companies that operated the industry were based overseas and engaged in other unsavory activities like bank fraud and using player deposits to fund their operations. The more skillful players consistently win.
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FanDuel was founded in Edinburgh in 2009 by entrepreneurs Nigel and Lesley Eccles, but only operates in America and Canada. Others, like NY and Washington, ban betting on games materially affected by chance, and still others prohibit betting if chance is a factor at all, no matter how minor.
