New York Attorney General has ordered homegrown site FanDuel and DraftKings to cease operations in his state. Eric Schneiderman ruled that the fantasy sports sites constitute illegal gambling under state law.
It’s a huge blow to the daily fantasy sites. Last month Nevada banned the sites for gambling and with New York following suit the sites will likely fight the ruling to prevent the ban spreading throughout the nation.
"Our review concludes that DraftKings'/FanDuel's operations constitute illegal gambling under New York law," Schneiderman wrote in a letter to the companies, obtained by ABC News and ESPN on Tuesday afternoon.
The AG’s office had been carrying out a review into daily fantasy sites for the last month. The sites had been operating under a 2006 federal law that classified fantasy sports as games of skill rather than gambling. However Schneiderman categorically said that these daily fantasy sites represent wagering on a ‘contest of chance’ and therefore are illegal.
He was clear not to implicate traditional fantasy sites which remain legal but was fairly scathing of the two companies saying they ran a “multi-billion-dollar scheme intended to evade the law and fleece sports fans across the country.”
Both sites continue to argue their platforms represent games of skill and responded with strong language.
In a statement, FanDuel said: “Fantasy sports is a game of skill and legal under New York state law. This is a politician telling hundreds of thousands of New Yorkers they are not allowed to play a game they love and share with friends, family, co-workers and players across the country.”
FanDuel is encouraging people to sign an online petition to "Save Fantasy Sports".
"Fantasy sports are clearly a game of skill," the Draft Kings statement said. "We strongly disagree with the reasoning in his opinion and will examine and vigorously pursue all legal options available to ensure our over half a million customers in New York State can continue to play the fantasy sports games they love."
Both companies will have a chance to challenge the order in court, where the state will have to prove that the games represent contests of chance.
FanDuel is based in New York, has just moved to a new 42,000 square foot office and has advertising deals with the New York Giants, Yankees and Nets. Valued at more than $1 billion dollars it is also one of the biggest companies in New York.
But the AG clearly doesn’t share the city’s sports teams’ love for the company when he said: “Today we have sent a clear message: not in New York, and not on my watch.”
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