DraftKings and FanDuel Can (Temporarily) Operate in New York After All

Earlier in the day Attorney General Eric Schneiderman’s request for a temporary injunction, shutting the businesses down in the state, was granted by Justice Manuel J. Mendez of the New York State Supreme Court.

“Today’s preliminary decision was wrong and we expect we will ultimately be successful”, FanDuel said in a statement. Both the preliminary injunction and the ensuing stay are temporary measures whose permanence will be decided in court later. Schneiderman posited that New York’s ban on bookmaking and other forms of sports gambling, instituted in 1894, precluded the two companies from doing business in his state.

Mendez drew on the gambling law’s definition of “contest of chance”, which says that the outcome turns “in a material degree” on chance, even if skill plays a role.

In this photo taken on Tuesday, Dec. 1, 2015, an ad for daily fantasy sports operator DraftKings is displayed in a subway station in Philadelphia.

Most states have no laws that specifically address fantasy sports but do have gambling laws that might dictate whether they’re legal. MA lawmakers have proposed specific regulations to protect consumers, while regulators in Nevada have restricted daily fantasy sports to existing casinos.

According to the Albany Times Union, if you try and visit the FanDuel site in NY, you will be greeted with a message that reads, “We’re sorry, but your location prohibits you from making deposits or playing on FanDuel”. But there is a possibility that New York State laws might catch up: two bills introduced by New York Assemblyman Dean Murray could make daily fantasy legal in the state, but they’re unlikely to go into effect before the companies are no longer granted the protection of the stay. Unless the judge grants a stay, the sites will be forced to stop accepting play from NY customers. While Collins had not yet reviewed Mendez’s order when speaking to WBFO, he criticized New York State for “hypocrisy” in going after sites such as DraftKings and FanDuel, all while the state itself is in the business of games of chance.

DraftKings and FanDuel say they’ll immediately appeal the court ruling.

“We believe we’re likely to succeed on our appeal, and we shouldn’t have to shut down our operations based on little evidence presented by the state”, Josh Schiller, an attorney for Boston-based DraftKings, told the Herald last night.

As of a few minutes ago, we were still able to set up a DraftKings account with a NY address.

“This is only the beginning of the legal process”, FanDuel said. By blitzing commercial air space and forging partnerships between major sports leagues, FanDuel and Draftkings have drawn a hefty amount of attention to themselves.