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New York wants DraftKings, FanDuel to return profits

By The Sports Xchange
New York wants DraftKings, FanDuel to return profits
A DraftKings logo is displayed in New York City on November 13, 2015. Daily fantasy giants DraftKings and FanDuel each filed a lawsuit Friday in New York State Supreme Court in Manhattan to try to stop New York Attorney General Eric Schneiderman from carrying out his threat to ban daily fantasy games from New York state. Photo by John Angelillo/UPI | License Photo

New York attorney general Eric Schneiderman has filed an amended lawsuit against DraftKings and FanDuel, asking the daily fantasy companies to give back all the money they made in the state.

In Schneiderman's filing on Thursday, New York wants the two companies to return to those who lost money and to pay a fine of up to $5,000 per case.

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Restitution of funds had never been a part of Schneiderman's previous case. The daily fantasy sports (DFS) companies took in more than $200 million in entry fees in 2015 from at least 600,000 customers in the state, according to ESPN.com.

Schneiderman was granted a temporary injunction on Dec. 11 to stop DraftKings and FanDuel from operating in New York, but hours later an appellate court judge gave the DFS sites an emergency temporary stay that allowed them to continue operating in New York.

RELATED DraftKings, FanDuel challenge Illinois AG ruling

The decision by Supreme Court Appellate Division Judge Paul G. Feinman came less than six hours after New York Supreme Court Justice Manuel Mendez barred the country's two biggest fantasy sports companies from doing business in New York.

The two sides are set to argue before an appellate panel on Monday to decide whether the fantasy companies can continue to operate in New York as the case proceeds to the trial stage.

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DraftKings has stayed open in New York throughout the challenges made by the attorney general, but FanDuel had shut down within the state for a short period after Schneiderman sent cease-and-desist demands in a letter on Nov. 10.

RELATED Illinois attorney general bans DraftKings, FanDuel as 'illegal gambling' operations

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

Lawyers for DraftKings and FanDuel have argued that their clients could not have violated gambling statutes because they were taking in entry fees and not wagers.

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 stopped operating in Nevada.

RELATED New York judge rules against DraftKings, FanDuel

On Dec. 24, DraftKings and FanDuel sued Illinois Attorney General Lisa Madigan after she declared daily fantasy sports illegal in the state. Illinois is one of the largest markets for DFS in the country. About 10 percent of DraftKings players are Illinois residents.

FanDuel's headquarters are located in New York and DraftKings is based in Boston.

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