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Fantasy draft sites ruled illegal in New York

By
The Sports Xchange
New York Governor Andrew Cuomo, left, listens to state Attorney General Eric Schneiderman. UPI/Mark Lennihan/Pool
New York Governor Andrew Cuomo, left, listens to state Attorney General Eric Schneiderman. UPI/Mark Lennihan/Pool | License Photo

Daily sports fantasy sites DraftKings and FanDuel were ordered by the New York State attorney general to stop accepting bets on Tuesday from New York residents.

The attorney general's office said that according to state law the fantasy games are considered illegal gambling.

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State Attorney General Eric T. Schneiderman issued a cease-and-desist order that is a stunning blow to a multibillion-dollar industry that has formed alliances with many professional sports teams and leagues.

Others states are expected to take similar action as a result of the New York ruling. The fantasy sites have come under recent scrutiny for their practices.

"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," Schneiderman said in a statement. "Today, we have sent a clear message: not in New York, and not on my watch."

Fantasy sports companies argue that their games are not gambling because skill is involved rather than chance.

"We're disappointed (Schneiderman) hasn't taken the time to meet with us or ask any questions about our business model before his opinion," Sabrina Macias, a spokeswoman for DraftKings, told the New York Times.

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She said about 500,000 people use the company's site in New York state.

Eric Soufer, a spokesman for the attorney general, said representatives from his office met with DraftKings multiple times.

FanDuel issued a statement on Tuesday after the ruling was announced.

"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."

In October, the Navada Gaming Control Board and the state's attorney general determined that daily fantasy sites should be defined as sports gambling and need a license to operate in that state. FanDuel and DraftKings immediately stopped operating in Nevada.

FanDuel's headquarters are located in New York and DraftKings is based in Boston. Both sites advertise heavily in New York City and around the country.

"Our investigation has found that, unlike traditional fantasy sports, daily fantasy sports companies are engaged in illegal gambling under New York law, causing the same kinds of social and economic harms as other forms of illegal gambling, and misleading New York consumers," Schneiderman said. "Daily fantasy sports is neither victimless nor harmless." Daily sports fantasy sites DraftKings and FanDuel were ordered by the New York State attorney general to stop accepting bets on Tuesday from New York residents.

Advertisement

The attorney general's office said that according to state law, the fantasy games are considered illegal gambling.

State Attorney General Eric T. Schneiderman issued a cease-and-desist order that is a stunning blow to a multibillion-dollar industry that has formed alliances with many professional sports teams and leagues.

Others states are expected to take similar action as a result of the New York ruling. The fantasy sites have come under recent scrutiny for their practices.

"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," Schneiderman said in a statement. "Today, we have sent a clear message: not in New York, and not on my watch."

Fantasy sports companies argue that their games are not gambling because skill is involved rather than chance.

"We're disappointed (Schneiderman) hasn't taken the time to meet with us or ask any questions about our business model before his opinion," Sabrina Macias, a spokeswoman for DraftKings, told the New York Times.

She said about 500,000 people use the company's site in New York state.

Eric Soufer, a spokesman for the attorney general, said representatives from his office met with DraftKings multiple times.

Advertisement

FanDuel issued a statement on Tuesday after the ruling was announced: "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."

In October, the Nevada Gaming Control Board and the state's attorney general determined that daily fantasy sites should be defined as sports gambling and need a license to operate in that state. FanDuel and DraftKings immediately stopped operating in Nevada.

FanDuel's headquarters are located in New York, and DraftKings is based in Boston. Both sites advertise heavily in New York City and around the country.

"Our investigation has found that, unlike traditional fantasy sports, daily fantasy sports companies are engaged in illegal gambling under New York law, causing the same kinds of social and economic harms as other forms of illegal gambling, and misleading New York consumers," Schneiderman said. "Daily fantasy sports is neither victimless nor harmless."

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