Judge orders FanDuel and DraftKings to halt all business in NY

The first announcement was made following New York Supreme Court Justice Manuel Mendez’s ruling that he had granted the request for a preliminary injunction banning all daily fantasy activity in New York for the interim period (until a wider court case was ruled on).

Other states have moved to regulate the online daily fantasy sports companies after both DraftKings and FanDuel mounted an aggressive advertising campaign ahead of the 2015 National Football League season. “I have said from the beginning that my job is to enforce the law, and that is what happened today”, Schneiderman said in a statement posted to his website on Friday. The companies have argued that not only do the games require skill, but in fact require more skill than seasonal fantasy sports games, which are already permitted in the state.

Daily fantasy sports giants DraftKings and FanDuel were ordered Friday to stop operating in NY, dealing a severe blow that is likely to reverberate across the industry.

The New York Attorney General ignited these fireworks when it sent a cease-and-desist order to these companies last month, declaring them to be illegal gambling operations.

Schneiderman has said that while the games can involve some skill, that doesn’t make them legal, since ultimately how customers fare depends on events out of their control, such as weather and injuries that bench real players.

His memorandum stated, “So-called Daily Fantasy Sports (‘DFS’) wagers fit squarely in both these definitions, though by meeting just one of the two definitions DFS would be considered gambling”. But in his decision, the judge says that Schneiderman has a better chance of winning than the fantasy sites do. Schneiderman’s office has estimated the two companies account for 90 to 95 percent of the daily fantasy sports market. The DFS sites had argued that they were collecting entry fees and not taking wagers, which they said does not constitute gambling. This will of course start a domino effect across the country, as there are eight other states with gambling regulations similar to New York’s, according to Reuters.

“There is a chance FanDuel can still succeed, but that chance is substantially less than it was before”, Nellie Drew, a sports law professor at the University of Buffalo, said in an email.