Result in: FanDuel and DraftKings lose New York court battle

By David Cook
A New York Supreme Court Judge has granted injunctions to ban FanDuel and DraftKings from operating in the state.

New York Attorney General Eric Schneiderman, who ruled that daily fantasy sports (DFS) constitute a game of chance under state law, made the request for injunctions in November and his request has been upheld by Justice Manuel Mendez.

Schneiderman’s office wrote to both companies in November ordering them to “cease and desist from illegally accepting wagers in New York State”.

Preliminary injunctions were granted against both FanDuel and DraftKings, and both filed temporary restraining orders against potential action, though the orders were denied.

FanDuel has pulled its services from New York, while DraftKings has not.

An emergency hearing was held in the same month, though Mendez did not make an immediate ruling.

David Boies, counsel to DraftKings, said it intends to “immediately file an emergency notice of appeal in order to preserve the status quo”.

FanDuel also intends to appeal and said in a statement: “We will be appealing — this is only the beginning of the legal process and, perhaps more importantly, the New York legislature is already moving forward on action to ensure our game remains legal and is regulated, which we strongly support. The court specifically noted that this was not a final determination of the issue and that discovery would be needed to fully resolve the legal question, which we think should be decided in our favour when all of the evidence is in.”

Schneiderman’s office said: “We are pleased with the decision, consistent with our view that DraftKings and FanDuel are operating illegal gambling operations in clear violation of New York law. I have said from the beginning that my job is to enforce the law, and that is what happened today.”

Fantasy sports were made exempt from the 2006 Unlawful Internet Gambling Enforcement Act, before the emergence of DFS, and Mendez did not believe this to be relevant.

“The UIGEA language exempting fantasy sports has no corresponding authority under New York State law as currently written,” he said.

FanDuel and DraftKings also made arguments in the hearing that season-long fantasy sports require less skill than DFS, but Mendez ruled this to also be irrelevant as it was not the issue in question.

The ruling comes after the Nevada Gaming Control Board announced in October that operators can no longer offer real-money DFS in the state unless they possess a licence to operate a sports pool issued by the Nevada Gaming Commission.

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