DraftKings power attorney unleashes his case against NY

Eric Schneiderman, the NY Attorney General, wrote an op-ed in the NY Daily News about why he thinks such betting sites should be considered illegal unregulated gambling, and Draftkings outside counsel David Boies, the attorney who took on Microsoft in an antitrust trial, held a call with the press on why the attorney general is wrong.

With Schneiderman’s bold move made, it has forced DraftKings Inc. and FanDuel Inc. into the proverbial corner where they are now fighting to defend the legality of their short-term daily fantasy sports, or DFS, contests in NY with a hearing on whether to grant the attorney general’s requested preliminary injunctions scheduled for next week. The lawyer compared daily fantasy sports with mahjong and video-game tournaments conducted with cash prizes, which he said were different from poker games because they involve random cards being dealt. Until the past few years, it was carried out over the course of the sport season with players choosing teams, players, etc. over several months’ time with winners declared at the end of the season. The state has the ninth-largest population of fantasy sports players, according to a survey by Eilers Research.

MA is placing restrictions on who can take part in daily fantasy sports.

To me, because of the small amount of apparent risk – and the fact that these services are laid out in the format of fantasy sports – daily fantasy sports (DFS) seem a whole lot more benign than traditional gambling, which is more risky.

Fantasy sports market leaders DraftKings and FanDuel have become big advertisers during National Football League games and other sports programs. The companies are appealing the injunction.

That data appears to come from this spreadsheet, which shows that NY in 2014 generated $25.6 million in “entry fees” and $2.5 million in revenue, second only to California’s $34.2 million in fees and $3.4 million in revenue.

Gambling laws vary from state to state, with the majority using a predominance test to determine which activities are games of skill and which are games of chance.

But it’s hard to say that DFS doesn’t require skill. If the judge sides with
Schneiderman, it would effectively shut down daily fantasy sports in NY until there is a trial. “If most people lose money and the same people continue to win repeatedly, that is absolute proof that this is a game of skill we are talking about and not a game of chance”. The DFS companies have been in litigation to defend their businesses, which Schneiderman has said are illegal gambling in the state. But what used to be a game played between close friends in leagues with annual drafts is quickly evolving.

By the winter, the Attorney General wants new regulations in effect that would regulate websites like DraftKings and FanDuel. “This kind of disparate results does not happen in casinos, in games of chance”.

Never be among the top five players by volume on any one site (based on site leaderboards). These questions are what sparked the attorney general’s inquiry in the first place.