DraftKings and FanDuel get a temporary reprieve in NY

“Our review concludes that DraftKings’/FanDuel’s operations constitute illegal gambling under NY law”, Schneiderman wrote in a letter.

Following an investigation by the New York Attorney General into a data scandal surrounding DraftKings and FanDuel in October, a court ruling was established Friday afternoon that prohibited daily fantasy sports operators to accept any payments or wagers from residents of the state.

“We look forward to demonstrating to the Appellate Division why they should uphold today’s decision to grant a preliminary injunction barring DraftKings and FanDuel from continuing their illegal gambling operations in New York”, Schneiderman spokesman Damien LaVera said in an email.

Participants in fantasy sports contests generally create a virtual team using the names of real players and compete against each other with the results based on the on-field or ice performance of the players listed on their rosters. Chances are, we are heading for a drawn-out trial that will determine the legality of daily fantasy sports.

In his ruling, Justice Manuel Mendez said the attorney general “established the likelihood of success” on his claims, citing the state’s “interest in protecting the public, particularly those with gambling addictions”.

There was no immediate comment from FanDuel or Schneiderman’s office on the immediate stay.

Daily fantasy sports sites like FanDuel and DraftKings continue to gain new users while state governments debate whether the sites are even legal.

DraftKings and FanDuel has argued that daily fantasy sports were games of skill, not chance.

FanDuel calls the ruling “only the beginning of the legal process” and says it ultimately expects to prevail. But today’s decision will still more than likely have reverberating effects in other states that have scheduled upcoming hearings to discuss the legality of DFS, including California, another state that is prime ground for players. Former New York City deputy mayor Randy Mastro, who is also representing DraftKings, told the committee, according to WGRZ, “Daily fantasy sports games have been played openly, permissibly, honestly in New York by hundreds of thousands of fans – including some members of the Assembly”. The state already has legalized some forms of gambling, including lotteries, betting on horse racing, video slot machines at racetracks and a number of forthcoming casinos.