NY Bans Fantasy Sports Sites FanDuel And DraftKings

Big TV marketers DraftKings and FanDuel – daily fantasy sports operations – have been deemed illegal by the NY State attorney general.

The letters on Tuesday from the office of NY Attorney General Eric Schneiderman said that the fantasy sites were considered gambling because customers “are clearly placing bets on events outside of their control or influence, specifically on the real-game performance of professional athletes”.

In a separate statement, he accused the companies of being “leaders of a massive, multibillion-dollar scheme meant to evade the law and fleece sports fans across the country”.

FanDuel also disagreed with the decision, saying in a statement: “This is a politician telling hundreds of thousands of New Yorkers they are not allowed to play a game they love”.

Whether games require skill or chance is a “legal question [that] often comes up in gambling cases”, said Raymond Sauer, a professor at Clemson University, who specializes in the economics of regulation and of sports.

Given that Nevada has already banned daily fantasy sports (to unregistered firms) and the NY attorney general’s long-standing role as a consumer-protection advocate, it seems likely that other states will follow suit in the not-too-distant future. They claim online fantasy games are games of skill just like betting on horse racing.

The distinction rests on whether the game is one of skill or chance.

The battle in NY comes amid national scrutiny of the industry. New Jersey, Pennsylvania, MA and Georgia are contemplating action as well, CBS2’s Diane Macedo reported. The popularity of the games has exploded over the past 15 years.

He stated: “Daily fantasy sports is neither victimless nor harmless”. Those sites allow paying participants to select a new team, or multiple teams, every day, and large cash prizes are awarded to the top performers.

Buy-in fees on the daily sites can range anywhere from 25 cents to $5,000. DraftKings and FanDuel contests, he wrote, are about “instant gratification” and involve no long-term strategy.

Media companies – Time Warner and Fox Sports – have equity interests in daily fantasy operations.

A representative for FanDuel did not immediately respond to a request for comment on Wednesday about whether they had, like DraftKings, updated their position on whether to fight the order.