DFS suffers fresh blow as New York rules it illegal
Market leaders FanDuel and DraftKings receive cease-and-desist order from stateâs attorney general
The daily fantasy sports (DFS) industry has been dealt yet another blow after the New York attorney general yesterday ruled the games to be illegal gambling under state law. [private]
DFS behemoths FanDuel and DraftKings have both been served with cease-and-desist orders with Attorney General Eric Schneiderman commenting the pair had âintended to evade the law and fleece sports fans across the countryâ.
New York is one of the DFS industryâs most lucrative markets boasting more than half-a-million registered players and the ruling could well have ramifications in a number of other states currently reviewing the activity.
In a statement, FanDuel contested the attorney generalâs verdict and reiterated its belief that fantasy sports was legal under New York state law.
âFantasy sports is a game of skill and legal under New York state law,â the statement said. âThis 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.â
Meanwhile a spokesperson for DraftKings said it disagreed with the judgment and would âexamine and vigorously pursue all legal options availableâ.
In the cease-and-desist letters send to FanDuel and DraftKings, the New York AG said DFS constitutes illegal gambling because a person stakes or risks something of value upon the outcome of a future contest of chance or contingent event not under his control or influence.
âDraftKingsâ customers are clearly placing bets on events outside of their control or influence, specifically on the real-game performance of professional athletes,â the letter to DraftKings read.
âFurther, each DraftKings wager represents a wager on a âcontest of chanceâ where winning or losing depends on numerous elements of chance to a âmaterial degreeâ, it added.
The attorney generalâs stance is similar to that of the Nevada Gaming Control Board, which recently ruled that DFS met the definition of gambling under state law and thus operators were required to apply for a sports betting license.
The DFS industry has come under intense scrutiny following the DraftKings data leak scandal which erupted last month, with a growing number of states and federal bodies investigating the legal status of daily fantasy sports.