Judge blocks operations of daily fantasy sports sites in NY

Both DraftKings and FanDuel have said they have hundreds of thousands of customers in NY, and Schneiderman’s office has estimated the two companies account for 90 to 95 percent of the daily fantasy sports market.

DraftKings and FanDuel have been hit with another pair of damaging blows in NY state.

“Unlike traditional fantasy sports, (daily fantasy sports) is designed for instant gratification, stressing easy game play and no long-term strategy”, Schneiderman’s office said in its cease-and-desist letter in November.

As daily fantasy sports websites DraftKings and FanDuel enter a protracted battle with the New York Attorney General regarding whether their practices constitute “gambling” and are therefore illegal in the state, they have at least an initial victory under their belts.

Fantasy sports companies and their users just lost big in NY.

Schneiderman disagrees and has argued that season-long fantasy games are legal because they aren’t pure gambling.

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”.

An appeals court judge allowed the companies to keep operating until additional judges have a chance to rule on the ban.

In an interesting twist the National Basketball Association owns equity in FanDuel while Major League Baseball and the NHL has a stake in DraftKings. The companies claim they offer games of skill, not chance, and are, therefore, legal.

The stay allows the fantasy sports sites to continue operations in NY until January 4th when the case goes up for further debate.

USA Today adds that, within minutes of learning of the judge’s ruling, lawyers for DraftKings filed a notice of appeal, and FanDuel expressed interest in following suit.

Mendez also highlighted that in order for a preliminary injunction to be granted, a likelihood of success warranting the injunction should be found, ruling that the Attorney General was most likely to prevail here. It was not immediately known if the site was going to open up its doors to NY residents.

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.

“We want to work with you to ensure that fantasy contests are legal, safe for consumers, and continue to provide the great entertainment value that has driven our growth over the past few years”, FanDuel’s counsel for policy and government affairs Cory Fox told assembled lawmakers in Albany.