Judge blocks DraftKings, FanDuel from doing business in NY

A NY judge on Friday ruled that the fantasy sports sites DraftKings and FanDuel can not operate in the state, dealing a major blow to the companies in their fight to prove that fantasy sports do not constitute gambling and instead are games of skill.

The whole argument is that Schneiderman is saying that daily fantasy sports platforms like DraftKings and FanDuel – and fantasy sports as a whole – are forms of illegal gambling, while the companies maintain that they are forms of skilled games that require knowledge. ESPN reports that after Attorney General Eric Schneiderman won a temporary injunction to force the companies to cease doing business in the state, an appellate court judge granted an emergency temporary stay.

At least 600,000 New Yorkers were playing daily fantasy sports on Fanduel and Draftkings, and they accounted for roughly $200 million in entry fees this year.

New Yorkers have been able to legally play our games for more than six years, and today’s preliminary decision was wrong and we expect we will ultimately be successful.

The ruling in Manhattan comes amid debate nationwide about whether online fantasy sports players are competitors or bettors.

Most states have no laws that specifically address fantasy sports but do have gambling laws that might dictate whether they’re legal.

FanDuel had already stopped accepting NY bets because of the earlier developments in the case, but DraftKings continued to accept NY players, arguing it was allowed to do so until the judge took action on Schneiderman’s motion. The ruling indicates that Mendez believes that Schneiderman is more likely to prevail on the merits of the case than DraftKings and FanDuel. Chances are, we are heading for a drawn-out trial that will determine the legality of daily fantasy sports.

A DraftKings lawyer said the company would appeal the ruling.

DraftKings has stayed open in NY throughout the challenges made by the attorney general, but FanDuel shut down within the state on November 17.

Friday morning, Manhattan state Supreme Court Justice Manuel Mendez temporarily barred both sites from taking play from one of their biggest customer bases, until “a final determination” of the court dispute. FanDuel did not immediately respond to a request for comment.