NY Atty General Says Daily Sports Illegal
New York Attorney General Bans Sports Daily Sites For Illegal Gambling
FanDuel and DraftKings have been ordered to immediately seize their operations on grounds that they are operating unlawfully with regard to New York State Law. According to Eric Schneiderman, the New York State attorney general, both companies’ operations constitute unlawful gambling under the law of the state hence they have to seize accepting bets from within the state, as well as stop transacting with New York citizens. The A.G. sent the companies a pair of letters saying that a one-month investigation had been carried out by his office, which that daily competitions are principally not games of skill but of chance.
While giving the order, the A.G. explained that daily fantasy sports is harmful and has victims while the two companies lead the multi-billion dollar scheme that is against the law and whose objective is to defraud New York citizens. This means that the two companies are involved in illegal gambling under State law and mislead New York consumers leading to economic and social harms just like any other form of unlawful gambling. Nevada was the first to make such a ruling and such an order is expected to greatly impact the multi-billion industry. It is likely that the two companies may continue facing prohibitions throughout the nation since most states have been investigating them with regard to consumer protection laws. The investigations were triggered by reports that an employee of DraftKings utilized internal data and won $350,000 on opponent site FanDuel, something that the operators repudiated. This led to the withdrawal of employees’ freedom of placing bets on the others site.
In their defense, both DraftKings and FanDuel content that their games happen to be games of skill rather than gambling: the ruling of the attorney general in New York goes against the primary defense of daily fantasy the 2006’ Unlawful Internet Gambling Enforcement Act (UIGE), which contends that the games are skill based but not gambling. However, the attorney general feels that every daily fantasy bet represents a wager on a chance contest whereby losing or winning are dependent on a number of elements of chance to a substantial degree. The attorney general’s order will ban the two companies from doing business with New Yorkers. However, the companies will challenge this ruling in court. According to a DraftKings spokesman, DraftKings will fight the ruling.
Other New York professional sports teams, which had entered into a partnership with both companies, are also affected by the attorney general’s ruling. Last year, Brooklyn Nets expressed its intentions to partner with FanDuel.