Yahoo a new target in NY daily fantasy sports probe

The sites requested temporary restraining orders Monday to stop Schneiderman’s effort to shut them down.

Schneiderman issued an administrative cease-and-desist order on November 11 following an investigation by his office concluding the two websites are illegal gambling operations.

David Boies, a high profile attorney hired by DraftKings last week, argued in his motion Monday that Schneiderman’seffort to shut down daily fantasy sites in NY was unconstitutional. The payouts are typically more than $20, but a few have been in six figures. Today we have sent a clear message: Not in NY, and not on my watch.

Schneiderman says DFS players are showing up in increasing numbers at Gamblers Anonymous meetings and problem gambling counselors’ offices, meaning the DFS contests “are causing the precise harms that New York’s gambling laws were created to prevent”.

FanDual stands by their business saying the company complied with state and federal law.

“We look forward to the court vindicating our position next week”, it said.

Like any sports wager, a DFS [daily fantasy sports] wager depends on a “future contingent event” wholly outside the control or influence of any bettor: the real-game performance of athletes.

Yahoo, known for running a season-long fantasy sports product, started offering daily fantasy sports this summer.

Attorney General Eric Schneiderman said in legal documents filed in a Manhattan trial court that the games are illegal gambling, no different from poker or blackjack.

Update: Rival fantasy sports site DraftKings has just announced that its staying open.

The documents also contain information on DraftKings’ state-by-state revenues from 2014, which, as a private firm, the company has not disclosed publicly before. The contests of this past weekend were open to residents and they have not stated that members who have money in their accounts would not be able to keep playing.

I’m not sure even the gutsiest bookmaker would take a bet on it, but the current bad news for daily fantasy sports companies could eventually be very good news for Las Vegas and the rest of the gaming industry.

The companies, and its customers, have fought back with lawsuits and protests.

The rejection of the gambling label by the DFS sites is particularly hard to square with the overt strategy of recruiting gamblers.

– DraftKings embedded gambling keywords into the programming code for its website like “weekly fantasy basketball betting” and “weekly fantasy college football betting” to drive traffic to its website from people looking to gamble on search engines like Google. The sites have all but admitted they’re gambling.

Schneiderman says the application of skill is no different in daily fantasy sports than in poker or blackjack, where a small percentage of players “use research, software, and large bankrolls to extract a disproportionate share” of the winnings.