New York bans DraftKings, FanDuel

The daily fantasy sports (DFS) industry has been dealt another blow, with the New York State attorney general ordering both DraftKings and FanDuel to stop offering services to their residents. According to attorney general Eric T. Schneiderman, DFS falls under the illegal gambling guideline.

“It is clear that DraftKings and FanDuel are the leaders of a massive, multibillion-dollar scheme intended to evade the law and fleece sports fans across the country,” said Schneiderman. “Today we have sent a clear message: not in New York, and not on my watch.”

According to the New York Times, the New York attorney general has held a historic role as a consumer-protection advocate, and legal experts strongly believe that other states will follow suit in banning DFS sites.

Just before Schneiderman’s decision to ban daily fantasy sports, DraftKings sent a message to their players that read:

“Attorney General Eric Schneiderman is considering preventing New Yorkers from playing daily fantasy sports. Hey, New York, protect your right to keep playing daily fantasy sports. Contact the attorney general today!”

Sabrina Macias, a spokesperson for DraftKings, added that the company is “disappointed he [Schneiderman] hasn’t taken the time to meet with us or ask any questions about our business model before his opinion.” Macias added that there are over 500,000 DFS players in New York alone.

Eric Soufer, a spokesperson for the attorney general’s office, disputes Macias’ claims and says that they met multiple times with DraftKings representatives before issuing the cease-and-desist order.

FanDuel is obviously not happy with the ban in New York either, writing the following:

“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.”

Joseph M. Kelly, a professor of business law at the State University College at Buffalo, believes that DraftKings and FanDuel have a strong case if they challenge the ruling. Assuming this happens, New York would have to prove that the chance element in DFS is so strong that it must be considered gambling.

Schneiderman’s order does not apply to seasonal fantasy sports leagues, which many friends and coworkers bet small amounts on. Instead, the cease-and-desist order is only for DFS, which involves choosing and betting money on player lineups for a single day.