“Fantasy Sports Sites Told to Cease in NY State” is categorized as “us”. The companies said Wednesday they intend to fight to remain in NY, in court if necessary.
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“I see two companies that are going to ask for forgiveness later, rather than permission first”, says Scott Jones, a sports marketing professor at Stetson University in Florida.
The Empire State moving to outlaw DraftKings and FanDuel could prompt others to join in on prohibiting the controversial market. Almost a dozen states are considering a few form of fantasy sports legislation, according to Gambling Compliance, an independent service that monitors gambling legislation, the NY Times said recently.
DraftKings is headquartered in Boston, FanDuel in NY.
The letter cited criminal code but FanDuel’s attorney, Marc Zwillinger, said the company believed Schneiderman’s letter was a “prelude to a civil action”. That gives them additional exposure to state and federal law enforcement. “Once everybody starts litigating the issue of whether or not a particular wager involves a game of chance or a game of skill, we are opening up Pandora’s box in NY state”, said Leibman, former executive director of the Government Law Center at Albany Law School.
DraftKings called the cease-and-desist letters from NY Attorney General Eric Schneiderman on Tuesday “hasty and uninformed” and said it was prepared to mount a legal challenge so that the company could continue operating in the state.
In daily fantasy football, players each week choose an optimal line-up with the goal of winning money against other people across the country. Local attorney Paul Hardin said it will come down to whether or not it’s a game of skill or gambling. The AG’s action does not implicate traditional season long fantasy sports.
FanDuel’s outside counsel Mark Zwillinger of the firm ZwillGen PLLC, who joined Eccles on a call with reporters on Wednesday, said he was “very optimistic” that he could convince NY Attorney General Eric Schneiderman within the allowed five-day period that FanDuel does not fit the definition of gambling under NY law.
Coakley said the NY Attorney General’s decision would have a “huge impact” on the industry.
Both companies have five days to offer either written arguments or make their case in person, though neither company nor Schneiderman would comment on when the meetings would take place.
The National Football League allows its players to participate in fantasy contests so long as the stakes don’t exceed $250 per year, The NY Times reported.
The ruling is a blow to the multi-million dollar sites, who last month were faced by a ruling from Nevada regulators that said the sites should in fact be considered gambling, not games of skill.
He says they’re based on chance, not skill.
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In the meantime, doing a big grandstanding rush job to shut these sites down to get all the headlines, without the benefit of a careful review and thoughtful understanding of the issues at play just seems like Schneiderman, once again, reminding innovative startups that NY is not welcoming for such innovation.
