On Wednesday, NY Attorney General Eric Schneiderman said daily fantasy sports constitutes as illegal gambling, meaning sites like DraftKings and FanDuel are now barred from operating in the state of NY. Several of the smaller fantasy companies quickly closed off their games to NY players, even though they were not ordered to do so by Schneiderman.
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They choose their own “fantasy” teams of players to compete against each other, picking star athletes from various National Football League teams, in the hope that the performances of these stars in the real on-field contests each Sunday will earn them jackpots of as much as $1m.
The confab, co-sponsored by DraftKings and FanDuel, was scheduled long before Schneiderman determined that daily fantasy games are a form of illegal gambling.
Former Attorney General Martha Coakley’s role as a DraftKings adviser has taken her back to the State House, where she said she’s huddled with lawmakers and pitched them on the fantasy sports giant’s “business model” that’s now under intense fire.
He threatened legal action unless they stop accepting play from NY. “The difference is, one’s legal and one is not”, Manfred said.
That gets to the heart of a central contention from FanDuel and DraftKings: that daily fantasy sports is a game of skill, not chance, and therefore does not qualify as gambling. “I think if people want to gamble at their own risk and own peril then I don’t think the government should control it”.
“Fortunately, there is a process by which DraftKings can challenge it in a court of law in an effort to prevent us from having to cease operations in the state of NY”, a statement from DraftKings said.
The reality about fantasy sports sites is that they have surged in recent years with little or no oversight from state or federal officials.
In response to Mr. Eccles’s comments, an attorney general spokesman referred to Tuesday’s cease-and-desist order, which described the companies as, “leaders of a massive, multibillion-dollar scheme meant to evade the law and fleece sports fans across the country”.
Since Haskell’s National Football League week No. 3 winnings were discovered, the companies have endured a blistering litany of legal actions, including more than a dozen lawsuits.
“There is no other reason why anyone in their right mind would put fantasy sports as a front issue when there are literally hundreds of more important things to worry about”, wrote “cantstopper” on Reddit. “Fantasy sports is a game of skill and legal under NY state law”, the statement said.
Yet the attorney general said only daily games were illegal, not the seasonal leagues that have been popular for decades. FanDuel’s headquarters are in NY, and DraftKings, based in Boston, recently opened an office in Manhattan. It was the flawless gift: Fidler has been playing fantasy sports since its infancy in the 1980s.
Sarah Jane Hughes, a professor at the Indiana University Maurer School of Law who specializes in banking and payment systems, suggested that financial companies are preparing to restrict accounts from NY if DraftKings and FanDuel lose their fight with Schneiderman.
If the industry fails to head off Schneiderman’s civil suit, it would probably seek a preliminary injunction from a NY State court declaring that daily fantasy sports don’t violate the state’s gambling laws.
FanDuel and DraftKings continue to argue against Schneiderman’s assertion that daily fantasy involves chance and not skill.
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He stated: “Daily fantasy sports is neither victimless nor harmless”.
