After DraftKings and the daily fantasy sports industry was given harsh treatment by New York’s attorney general, Maura Healey’s response has already been called “common sense” and “player friendly”.
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It’s a reasonable, measured proposal that other states should consider emulating instead of New York’s forceful attempt to stuff the genie back into the bottle by banning the practice altogether. Also, the AG’s office is undecided on what to do about NY residents who are now midseason.
Wednesday’s hearing is scheduled for noon ET in front of NY Supreme Court Justice Manuel Mendez.
The US state of MA is proposing to ban those under the age of 21 from playing paid fantasy sports games. The few narrow exceptions that exist – which do not include sports betting – all come with strong regulation and oversight to ensure fairness and protect New Yorkers from fraud.
Other states are taking a different approach to regulating daily fantasy sports.
The attorney general cites the NY penal law, which defines illegal gambling as risking something of value upon the outcome of a contest of chance or a future contingent event not under his control or influence.
Boies said DraftKings has been operating for four years in NY and FanDuel for eight without previous problems. FanDuel has stopped operating in NY, but Draftkings and Yahoo are continuing to do so. “It would be a disaster for the company, its employees, its investors and it would unfair to the tens and thousands of its customers to simply shut it down because the attorney general has changed his mind on whether or not it’s legal, without taking his case to the court”.
And this was before the actual legal debate hinging on whether or not companies like FanDuel and DraftKings are gambling services. But there are skillful sports gamblers and poker players who have to ply their trades illegally unless they want to live in Las Vegas, and anyone willing to slap down a dollar can make a perfectly legal bet on skill-less scratch-off lotteries run by the state.
“The threshold for what constitutes an illegal lottery in NY is low”, says Daniel Wallach, a sports and gaming legal expert and a shareholder at Becker & Poliakoff in Ft.
Still, Healey said, she expects the companies to begin the work of complying with them immediately. But what used to be a game played between close friends in leagues with annual drafts is quickly evolving.
Daily fantasy advertising must make greater disclosures as far as likelihood of winning and the average win, holding more strictly to a “truth in advertising” standard. The question is a practical one.
“It’s not luck that determines them”, he says.
Attorney David Boies, recently retained as counsel for DraftKings, outlined his client’s case in NY during a conference call with the media on Friday.
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“We believe the attorney general’s view of this issue is based on an incomplete understanding of the facts about how our business operates and a fundamental misinterpretation and misapplication of the law”, DraftKings said in a statement.
