DraftKings, FanDuel fantasy sports sites file lawsuits in New York

By The Sports Xchange
DraftKings and FanDuel have filed separate suits trying to stop a cease-and-desist order from the attorney general in New York.
DraftKings and FanDuel have filed separate suits trying to stop a cease-and-desist order from the attorney general in New York.

Daily fantasy sports sites DraftKings and FanDuel filed separate lawsuits Friday in New York State Supreme Court to try to stop the state attorney general's cease-and-desist order.

The suits come after New York Attorney General Eric Schneiderman's decision on Tuesday to demand that the companies stop accepting "bets" in the state. The attorney general's office said that, according to state law, the fantasy games are considered illegal gambling.


Schneiderman gave DraftKings and FanDuel five days to respond to his letter before initiating legal proceedings against them in an attempt to shut them down in New York.

DraftKings and FanDuel filed petitions arguing that illegal interference with their business operations would cause irreparable harm.

"Today, we have taken decisive legal action to prevent a unilateral, misinformed and legally misguided attempt by the New York Attorney General to act as judge, jury and executioner for daily fantasy sports in New York," DraftKings said in statement. "We are asking the New York Supreme Court to rule that the Attorney General's cease-and-desist letter is unconstitutional, an abuse of discretion, and simply wrong. We are confident in our legal position and intend to continue to fight to preserve the right of the over 500,000 New York consumers to play the fantasy sports games they love."


In its petition, DraftKings called Schneiderman's order to cease taking business from customers in New York a "shocking overreach."

"He has unleashed an irresponsible, irrational and illegal campaign to destroy a legitimate industry," DraftKings' filing said.

FanDuel's legal action addressed Schneiderman's position that the sites are illegal sports books as defined by New York law.

"FanDuel's business does not constitute 'bookmaking' under New York law because the underlying DFS contests are not gambling and because FanDuel does not stand to profit based on the results of those contests (or have any economic interest in one outcome over another, as a casino or bookmaker would)," FanDuel's lawsuit said.

Schneiderman issued a statement Friday in response to the lawsuits, stating his next step will be to convince the court that the two companies stop taking business from fans in New York.

"The Attorney General's job is to enforce New York State law, and the law here is clear. Online sports gambling sites are illegal in New York," Schneiderman said in his statement. "DraftKings and FanDuel are operating illegal sports betting websites under New York law, causing the same kinds of social and economic harms as other forms of illegal gambling. As a result, our office issued a cease and desist letter to stop them from violating state law by accepting bets from people in New York. Because both companies have refused to follow the law in our state, we will take action to enforce state law."


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.

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