NY attorney general files request to halt fantasy sports gambling by

FanDuel added that the suspension of paid games is expected to be temporary and all users in the Empire State “can and will absolutely” be able to withdraw their money at anytime.

“Yahoo does not comment on legal matters”, a spokesman said in a statement. Or do state attorneys general collectively raise the issue of regulating and legalizing sports betting, including the fantasy games, at the federal level?

On Nov 13, Schneiderman sent cease and desist letters to DraftKings and FanDuel, demanding that they stop taking money from players in the state. Schneiderman’s office hasn’t suggested it is looking to negotiate, but the attorney general has taken antagonistic stances against tech companies in the past before looking for common ground.

On its website, FanDuel says “As a result of that decision, we are temporarily suspending entry in paid contests for people located in NY as of 2:30 pm EST today, Tuesday, November 17th”. The payouts are typically more than $20, but a few have been in six figures. NY accounts for about 7% of DraftKings’ “active users” who “wagered” over $25 million on the site in 2014 in hopes of big ad-promised wins.

DraftKings said in a statement that it believes Schneiderman’s view “is based on an incomplete understanding of the facts about how our business operates and a fundamental misinterpretation and misapplication of the law”.

DraftKings said it would continue to allow New Yorkers to play unless a NY court decides otherwise. The state government’s top lawyer is seeking a preliminary injunction to turn off the companies’ businesses in NY.

“We look forward to the court vindicating our position next week”, it said.

Schneiderman acknowledges that gambling can combine both skill and chance, as evidence of games like poker and blackjack. “But if we’re going to de facto legalize sports gambling across the USA, we should at least do it on objective and not because two companies have somehow weaseled out a way to pretend they are not something that they clearly are”.

FanDuel is the industry leader in one day fantasy sports.

FanDuel argued in its motion that Schneiderman’s attempt to draw a distinction between daily fantasy sports games and those that take place over the course of a season has no basis in law.

The order is the latest threat to daily fantasy sports. A hearing on the injunction is scheduled to be heard by a NY state court on Nov 25. Both companies control around 90 percent of the multi-billion dollar market. They also have recently prohibited employees from playing on rival sites. Schneiderman contrasts DraftKings’ claims of easy winnings with the site’s own stats that show 89.3% of DFS players had a negative return on their investment between 2013 and 2014.

The rejection of the gambling label by the DFS sites is particularly hard to square with the overt strategy of recruiting gamblers. The sites have all but admitted they’re gambling.

DraftKings’ heavy sponsoring of the World Series of Poker, which the DFS platform discontinued in light of legal challenges, is proof in Oliver’s mind that fantasy contests and gambling are intertwined.