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DraftKings and FanDuel terminate their merger agreement

The decision comes after the FTC said it would oppose the deal

Last month, the Federal Trade Commission (FTC) said that it would be moving to block a merger between DraftKings and FanDuel, saying that the anticompetitive harm would be too great if the deal was allowed to go through.

The daily fantasy sports juggernauts, who not that long ago were fierce rivals, said that the merger would allow them to compete with a broader range of businesses, saying that it was “in the best interest of our players, our companies, our employees, and the fantasy sports industry.” Now, it seems that some officials are backpedaling on that sentiment.

In a statement released Thursday, DraftKings CEO Jason Robins announced an end to the merger deal, and that DraftKings would benefit in the long-run by staying independent. 

“We believe it is in the best interests of our customers, employees, and investors to terminate our agreement to merge with FanDuel and move forward as a separate company,” Robins said. “This will allow us to singularly focus on our mission of providing the most innovative and engaging interactive sports experience imaginable, forever changing the way fans connect with teams and athletes worldwide.”

In a related Q&A section for customers, DraftKings also said that it would be withdrawing from litigation with the FTC over its attempt to block the merger. 

Last month, the Federal Trade Commission (FTC) said that it would be moving to block a merger between DraftKings and FanDuel, saying that the anticompetitive harm would be too great if the deal was allowed to go through.

The daily fantasy sports juggernauts, who not that long ago were fierce rivals, said that the merger would allow them to compete with a broader range of businesses, saying that it was “in the best interest of our players, our companies, our employees, an...

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    FTC moves to block merger between DraftKings and FanDuel

    The agency has filed suit to stop the deal from going through

    Last week, three sources close to the Federal Trade Commission (FTC) said the agency might try to block a proposed merger between daily fantasy sports (DFS) juggernauts DraftKings and FanDuel. Today, those predictions came true.

    In a complaint filed Monday, FTC acting chairwoman Maureen Ohlhausen, a Republican, and Democratic panel member Terrell McSweeny both agreed to challenge the deal. In the agency’s initial antitrust investigation of the deal, regulators said that the merging of the two companies would give the new entity a stranglehold of over 90% of the DFS market.

    “This merger would deprive customers of the substantial benefits of direct competition between DraftKings and FanDuel,” said Tad Lipsky, Acting Director of the FTC’s Bureau of Competition.

    Anticompetitive harm too great

    The agreement between Ohlhausen and McSweeny puts to bed any concerns that the merger wouldn’t be challenged due to a split vote. If the two FTC panel members hadn’t reached a consensus, then the resulting deadlock would have allowed the deal to proceed anyway.

    The resulting 2-0 vote has authorized staff to seek a temporary restraining order and preliminary injunction that will stop the deal from going through. While the merger could ultimately still prevail, that will depend on the findings of an administrative trial that will begin on November 21, 2017.

    DraftKings and FanDuel, who were once fierce competitors, sought to merge after facing an abundance of regulatory scrutiny in several states and experiencing several setbacks. In their filing, the companies said that they offered different products that put them in competition with a broader range of businesses, but the FTC ultimately decided that the competitive harm to the DFS market was too great.

    “We are disappointed by this decision and continue to believe that a merger is in the best interests of our players, our companies, our employees and the fantasy sports industry. We are considering all our options at this time,” DraftKings and FanDuel said in a joint statement. 

    Last week, three sources close to the Federal Trade Commission (FTC) said the agency might try to block a proposed merger between daily fantasy sports (DFS...

    Regulators may try to block the merger between DraftKings and FanDuel

    FTC officials say that the deal may violate antitrust rules

    Back in November, DraftKings and FanDuel – the two biggest players in daily fantasy sports – agreed to a merger, saying that their union would better enable them to serve customers. But a recent Recode report shows that the Federal Trade Commission (FTC) isn’t so keen on the deal.

    Three sources close to the situation have said that the FTC may block the merger because the resulting entity would control too much of the competitive market. Estimates show that the companies account for around 80% of the daily fantasy sports market, which has generated warning flags during the antitrust review of the agreement.

    While some officials have brought up the possibility of suing the companies to stop the deal, the decision will still ultimately fall to a vote by the FTC commissioners, which could happen before the week is through.

    Legal hurdles

    This isn't the first time that DraftKings and FanDuel have faced regulatory scrutiny. Last year, the companies both found themselves in a legal battle with New York Attorney General Eric Schneiderman, who stated that the sites violated state gambling laws.

    The suit was later overturned after legislation was passed stating that DFS is a legal activity, but further allegations over false and misleading marketing practices came back to bite both companies to the tune of $6 million.

    New York wasn’t the only state putting up a fight against the companies, though. Legal battles in Virginia, Texas, Illinois, and Nevada kept both companies on their toes. Experts have said that the merger was one way to control costs and to create a unified effort towards legal defense and lobbying efforts. However, DraftKings CEO Jason Robins said the move was all about advancing forward.

    “Joining forces will allow us to truly realize the potential of our vision, and as a combined company we will be able to accelerate the pace of innovation and bring a richer experience to our customers than we ever could have done separately,” he said.

    Difficult deal to block

    Regardless of the motive, the merger may prove to be something that the FTC has trouble stopping. Although regulators could point out that the deal threatens competition in the DFS marketplace, DraftKings and FanDuel have rolled out other products that put them in competition with a broader range of businesses.

    Gaming and sports lawyer Daniel Wallach says that fact has helped the companies “buttress the contention that they’re not just simply in the space for daily fantasy sports.”

    “From DraftKings and FanDuel’s perspective, the broader the marketplace, the better it [looks] for their proposed combination. The more persuasively they can make that case, the more likely they [are to] survive antitrust scrutiny,” he told Recode.

    Another advantage that the companies have involves the current make-up of the FTC panel reviewing the deal. As it stands now, there is only one Republican and one Democrat serving on what is supposed to be a five-person panel. If they choose to split their vote on a decision to block the deal, then the resulting deadlock would allow the merger to proceed anyway.

    Back in November, DraftKings and FanDuel – the two biggest players in daily fantasy sports – agreed to a merger, saying that their union would better enabl...

    DraftKings and FanDuel agree to merge

    Companies say it will save money, better serve players

    The two largest daily fantasy sports (DFS) enterprises, DraftKings and FanDuel, have agreed to merge. The transaction is expected to close next year, the companies said in a release.

    The merger was not unexpected. Both companies have spent the last 18 months in the crosshairs of various state attorneys general, most notably Eric Schneiderman of New York, who sued the companies for violating the state's gambling laws.

    The companies said the merger will enable them to better serve customers, who pay money to enter a team of actual sports players, winning points based on how those players perform in actual games. Winners can receive large cash prizes.

    But the merger undoubtedly will help both enterprises control costs, which rose when they were forced to mount legal defenses in a number of states and later on to lobby various state legislatures for legal exemptions from gambling laws.

    The companies from the beginning maintained they were exempt from gambling laws because their games were classified as games of skill, not chance. Many states took issue with that interpretation.

    “We have always been passionate about providing the best possible experience for our customers and this merger will help advance our goal of building a transformational global sports entertainment platform,” said DraftKings CEO Jason Robins. “Joining forces will allow us to truly realize the potential of our vision, and as a combined company we will be able to accelerate the pace of innovation and bring a richer experience to our customers than we ever could have done separately.”

    The two largest daily fantasy sports (DFS) enterprises, DraftKings and FanDuel, have agreed to merge. The transaction is expected to close next year, the c...

    How daily fantasy sports critics may have made it stronger

    It appears FanDuel and DraftKings are poised to merge

    As daily fantasy sports (DFS) became incredibly popular and profitable, two DFS enterprises, FanDuel and DraftKings, emerged as the biggest players.

    In the fall of 2015, their TV ads were everywhere. The two companies spent more money on advertising than beer companies as they both competed for players. It was also about that time that a number of states began suing DraftKings and FanDuel, claiming they were violating gambling laws. Suddenly, both companies found themselves besieged by critics.

    So these competing rivals got to be a little friendlier. No doubt their legal teams compared notes and their top executives chatted from time to time. Their lobbyists probably worked together to persuade various state legislatures to exempt DFS from gambling laws.

    Now, it appears critics of FanDuel and DraftKings may have driven them into one another's arms, with various publications reporting the two companies are poised to merge with each other. Bloomberg News quotes sources familiar with the discussions as saying DraftKings co-founder Jason Robins will lead the combined enterprises while FanDuel co-founder Nigel Eccles will serve as chairman of the board. Neither company has commented on the reports.

    Investors would like to see it

    The investment community has been cheering for a possible merger for some time, pointing out that the two companies have nearly identical games that could neatly fit under one operation. A combined company would not need to spend nearly as much on advertising.

    Like any potential merger, there would likely be anti-trust concerns. The two companies reportedly control about 90% of the DFS market. In 2015, there were more than 57 million people in the U.S. and Canada playing DFS games, according to the Fantasy Sports Trade Association.

    However, more recent research suggests the growth of DFS is slowing and that there are fewer new players choosing to participate. That could be strong incentive for both DraftKings and FanDuel to join forces, with savings on ad spending going straight to the bottom line.

    As daily fantasy sports (DFS) became incredibly popular and profitable, two DFS enterprises, FanDuel and DraftKings, emerged as the biggest players.In...

    FanDuel, DraftKings, reach settlement with New York

    Both firms pay the state $6 million over marketing practices

    The long and bitter war between the two major daily fantasy sports (DFS) enterprises and the state of New York has reached a peaceful conclusion.

    New York Attorney General Eric Schneiderman has reached separate $6 million settlements with both companies, which run games where players can win money based on the performance of actual players on their “fantasy” teams.

    Last fall, as DFS games were reaching their height of popularity, Schneiderman sued both DraftKings and FanDuel, claiming both were in violation of New York's gambling laws. The two companies fought the suits, saying they offered games of skill, not chance.

    In the end, the settlement revolves around Schneiderman's charges that both companies engaged in false and deceptive advertising. The complaint alleged both companies misled novice players about their chances of winning, giving “false and misleading” statistics about the odds.

    During the protracted litigation, Schneiderman secured an injunction preventing both companies from offering games to New York residents. Between March and August, the companies were not allowed to accept money from New Yorkers.

    Terms of the settlement

    In agreeing to terms, both DraftKings and FanDuel agreed to change marketing practices, providing clear disclosure of terms and conditions and information about expected performance.

    “Today’s settlements make it clear that no company has a right to deceive New Yorkers for its own profit,” Schneiderman said in a statement. “DraftKings and FanDuel will now be required to operate with greater transparency and disclosure and to permanently end the misrepresentations they made to millions of consumers. These agreements will help ensure that both companies operate, honestly and lawfully in the future.”

    The issue of whether DFS violates New York's gambling laws went away in August, when New York enacted legislation that specifically says DFS is a legal activity. Most other states have enacted similar laws.

    Fantasy sports began as an informal hobby among sports enthusiasts. These informal “leagues” lasted an entire season, with participants getting points each week based on how their players performed in real games.

    DFS made it a professional enterprise, allowing participants to form different teams daily or weekly, winning money if their “team” won. Critics said there was little difference between that and betting on the outcome of a game.

    The long and bitter war between the two major daily fantasy sports (DFS) enterprises and the state of New York has reached a peaceful conclusion.New Yo...

    DraftKings, FanDuel, reportedly ending college games

    Voluntary action follows discussions with NCAA

    Under fire from seemingly all sides, daily fantasy sports (DFS) enterprises DraftKings and FanDuel are reportedly dropping all college games and will go pro.

    Sports network ESPN quotes statements from both companies, saying that extensive discussions with the NCAA led them to take this voluntary action. Statements to ESPN by the two companies say the last college games they will offer will be the men's NCAA Final Four and Championship, played this weekend and Monday.

    ESPN quotes a statement from FanDuel, saying it reached its decision after months of conversations with the NCAA, member schools, and various state legislators.

    "It is clear that this is an issue that matters to a variety of constituencies and we feel that the best path forward is to suspend offering these contests pending resolution on the issue within state legislatures," said FanDuel in a statement to ESPN.

    DraftKings issued a similar statement, agreeing that suspending college games from its lineup is the "best path forward for the industry at this time."

    After both companies' burst of high-profile success in the second half of a large year, a number of states have questioned the legality of the games, which were classified as games of skill under federal gambling statutes.

    But several states, most notably New York, have accused DraftKings and FanDuel of operating games of chance in violation of state laws against gambling. Since then, both companies have stepped up their lobbying efforts, seeking state laws that would make their games an exception.

    Virginia passed such a law earlier this year. Other states are considering similar action.

    Under fire from seemingly all sides, daily fantasy sports (DFS) enterprises DraftKings and FanDuel are reportedly dropping all college games and will go pr...

    FanDuel and DraftKings settle in New York, shutting down games within the state

    Both companies agree not to accept players from the lucrative market, at least for now

    If you had put money on DraftKings and FanDuel, the two daily fantasy sports (DFS) giants, prevailing over New York Attorney General Eric Schneiderman, you would have lost money.

    Schneiderman issued a statement Monday, saying his office had reached settlements with both DraftKings and FanDuel, which calls for both companies to no longer accept players from New York state.

    “I’m pleased to announce that both FanDuel and DraftKings will stop taking bets in New York State, consistent with New York State law and the cease-and-desist orders my office issued at the outset of this matter,” Schneiderman said in his statement. “As I've said from the start, my job is to enforce the law, and starting today, DraftKings and FanDuel will abide by it.”

    Schneiderman sued both companies in October, claiming their DFS games amounted to illegal gambling. After he issued a cease and desist order, both companies appealed, saying their games require skill and are legal under federal law.

    Raising the ante

    Then Schneiderman raised the ante, amending his complaint to demand civil damages from the two companies and to require them to pay millions in restitution to New York players who had lost money.

    Knowing when to hold 'em and when to fold 'em, the two companies agreed to give up the lucrative New York market, at least for now. In its statement, DraftKings suggested the withdrawal from New York might be temporary.

    “We will continue to work with state lawmakers to enact fantasy sports legislation so that New Yorkers can play the fantasy games they love,” the company said.

    Earlier this month, Virginia became the first state to enact legislation that specifically declares DFS games to be legal. Both companies are actively encouraging other states to take similar action.

    Schneiderman, meanwhile, made it clear his case against DraftKings and FanDuel has not been affected by the settlement. He said he will continue to press false advertising and consumer fraud charges in court.

    If you had put money on DraftKings and FanDuel, the two daily fantasy sports (DFS) giants, prevailing over New York Attorney General Eric Schneiderman, you...

    Virginia governor signs daily fantasy sports law

    First state to formally declare the games are legal

    Virginia has become the first state to formally establish the legality of daily fantasy sports (DFS), which many other states have declared to be illegal gambling.

    Virginia Governor Terry McAullife signed a measure passed by the Virginia General Assembly in late February.

    For those who watched no television during the late summer and early fall, and thus missed the thousands of TV commercials for DraftKings and FanDuel, DFS is, in fact, a lot like gambling.

    Instead of betting on teams to win or beat the spread, DFS players assemble fantasy teams of actual players who compete in an actual league. They are assigned points for how well each player performs in a given game and the DFS league player with the most points wins money. Those who don't win forfeit the money they paid to play.

    See, a lot like gambling. So much so that a handful of states declared the games illegal from the get-go. Nevada later declared them to be gambling, followed by New York, where Attorney General Eric Schneiderman has gone to court seeking restitution for players and civil penalties.

    The Virginia legislation, in effect, says the games are legal, whether they are gambling or not. DFS enterprises like FanDuel and DraftKings, that allow players from Virginia to participate, must pay a $50,000 fee to the state.

    Provisions

    Other provisions of the new law include:

    • Requiring fantasy sports sites to implement policies intended to verify that all participants are 18 years or older

    • Preventing the sharing of confidential information that could affect fantasy contest play with third parties until the information is made publicly available

    • Requiring player funds to be segregated from a company’s operational funds

    • Banning employees of fantasy sports sites (as well as relatives living in the same household) from competing in public fantasy sports contests for cash prizes on any site, and

    • Requiring fantasy sports companies to undergo two independent yearly audits of their operations to ensure compliance with all regulations.

    A spokesman for FanDuel said the company hopes other states that have questioned DFS' legality will pass similar legislation.  

    Virginia has become the first state to formally establish the legality of daily fantasy sports (DFS), which many other states have declared to be illegal g...

    Daily fantasy sports steps up grass-roots lobbying campaign

    Industry supporting legislation declaring the games are not gambling

    Thanks to intense lobbying, many states that have suggested that daily fantasy sports (DFS) sites like DraftKings and FanDuel engage in illegal gambling are now considering laws to allow exceptions.

    DFS leagues have gotten around federal gambling statutes because they have been declared games of skill instead of luck. Players choose “teams,” made up of real players, and get points for how well the players perform during a given game.

    In illegal gambling, players choose a team and are rewarded if the team wins a particular game, or performs better than expected – beating the odds.

    A number of attorneys general have looked at DFS and decided “if it looks like a duck, and walks like a duck, it's probably a duck.”

    Illinois declares illegal

    In Illinois, Attorney General Lisa Madigan is among them. She issued an opinion in December that declared DFS games to be in violation of the state's gambling laws.

    “Absent legislation specifically exempting daily fantasy sports games from the gambling provisions, it is my opinion that daily fantasy sports contests constitute illegal gambling under Illinois law,” Madigan concluded.

    In Illinois, and a number of states, legislatures are, in fact, considering measures that would declare that, while DFS might in fact look an awful lot like gambling, it really isn't.

    Big spenders

    The Wall Street Journal reports that the industry's lobbying arm is spending big – as much as $10 million – to support DFS-friendly legislation in all but 16 states – even states that have not yet taken a position on the legality of DFS.

    In late January, the Tampa Bay Times reported legislation to establish the legality of DFS is making progress in the Florida legislature. While most states considering legalization would tax DFS revenue, the Florida legislation would require major DFS companies to pay $500,000 to register with the state.

    As we reported back in October, the huge popularity of DFS, the involvement of major media companies and sports leagues, and the mountains of cash involved, all suggested that DFS was already “too big to fail.”

    With some states already moving aggressively against the established DFS enterprises – most notably New York and Nevada – it might not be surprising that the industry is moving quickly to shore up its legal position in the rest of the states – perhaps before the start of baseball season.

    Thanks to intense lobbying, many states that have suggested that daily fantasy sports (DFS) sites like DraftKings and FanDuel engage in illegal gambling ar...

    Texas latest state to question daily fantasy sports legality

    Attorney General Ken Paxton draws distinction with informal fantasy leagues

    There could be more trouble on the horizon for daily fantasy sports (DFS) enterprises and players in Texas who participate.

    Texas Attorney General Ken Paxton is the latest state law enforcement representative to suggest the games offered by FanDuel and DraftKings amount to illegal gambling.

    “It’s my duty as Attorney General to look to the law, as passed by the people’s representatives, to answer the questions put to this office,” Paxton said in a statement. “Paid daily ‘fantasy sports’ operators claim they can legally operate as an unregulated house, but none of their arguments square with existing Texas law. Simply put, it is prohibited gambling in Texas if you bet on the performance of a participant in a sporting event and the house takes a cut.”

    Paxton issued an opinion requested by a Texas state representative. Rep. Myra Crownover, Chair of the Committee on Public Health. She asked Paxton whether the sports leagues are permitted under Texas law and whether it is legal in fantasy where the “house” does not take a cut.

    Informal leagues are fine

    Paxton said he believes, as a general rule, informal fantasy leagues where participants split any money among themselves are legal. But, he says, DFS enterprises are wrong in claiming an actual-contestant exception, which applies only to contestants in an actual skill or sporting event. And unlike some other states, Texas law only requires “partial chance” for something to be gambling. It does not require that chance predominate, he said.

    “It is beyond reasonable dispute that daily fantasy leagues involve an element of chance regarding how a selected player will perform on game day,” Paxton wrote in the opinion. “The participant's skill in selecting a particular player for his team has no impact on the performance of the player or the outcome of the game.”

    Other states

    Texas is just the latest state to look at DFS with a skeptical eye. In New York, Attorney General Eric Schneiderman has sued both FanDuel and DraftKings in an effort to force them to stop accepting players from the state.

    Additionally, Schneiderman has asked the court to order the two companies to return money spent by New Yorkers and pay civil damages. An appeals court will hear the suit and, in the meantime, has granted the two companies a stay so that New Yorkers may continue to play until the case is decided.

    Last month, Illinois Attorney General Lisa Madigan issued a similar opinion, saying it is her belief that DFS violates Illinois gambling laws.

    Unlike New York, however, Illinois may move to change state law to make the highly popular games legal. Madigan disputes the claim that daily fantasy sports are protected under a 2006 federal law, pointing out that law specifically leaves it up to the states to determine whether the games are, in fact, gambling.

    Madigan notes that legislation is currently pending in both Illinois legislature chambers to create a new act – the Fantasy Contests Act. The proposed law, Madigan says, would specifically exempt fantasy contests from the general prohibition against gambling.

    Without passage of the law, says Madigan, Illinois residents playing daily fantasy sports games are breaking the law.

    There could be more trouble on the horizon for daily fantasy sports (DFS) enterprises and players in Texas who participate.Texas Attorney General Ken P...

    Fantasy sports sites win reprieve in New York

    Court rules New Yorkers may play, pending the court's final ruling

    Daily fantasy sports (DFS) enterprises DraftKings and FanDuel are celebrating a New York appellate court ruling, granting them a stay and allowing them to accept players from New York.

    New York Attorney General Eric Schneiderman had secured a court order, requiring both companies to stop accepting players from New York, claiming the games constitute illegal gambling. The companies won a stay Monday, allowing them to continue operating in the state until the court can make a final ruling.

    “We are pleased with the Court’s ruling today,” said David Boies, counsel to DraftKings, in a statement emailed to ConsumerAffairs. “Daily fantasy sports contests are as legal now as they have been for the past seven years that New Yorkers have been playing them. As our litigation continues, we expect an appellate court to see what we have known since the outset: DFS is a game of knowledge and skill, one that builds community and whose competitive spirit has become important to the lives of millions of people.”

    Upping the ante

    Schneiderman strongly disagrees. In his most recent action in the case, he amended his complaint to require both DraftKings and FanDuel to repay all money spent by New Yorkers to play the games. He also asked the court for a $5,000 fine per case – a fine that would run into the billions of dollars.

    In his complaint to the court, Schneiderman said the games are not games of skill, as the companies claim, but simply games of chance. Boies says he's confident the court will see it differently.

    “Our ongoing appeal will make clear that daily fantasy contests require just as much skill as season-long contests, which the attorney general recognizes as perfectly legal under state law,” Boies said.

    Daily fantasy sports (DFS) enterprises DraftKings and FanDuel are celebrating a New York appellate court ruling, granting them a stay and allowing them to ...

    Daily fantasy sports declared illegal in Illinois

    But state is considering a new law exempting the games from gambling regulations

    In an opinion requested by two state legislators, Illinois Attorney General Lisa Madigan says she believes daily fantasy sports games provided by enterprises like FanDuel and DraftKings constitute illegal gambling, in violation of Illinois law.

    While not carrying any legal force, the attorney general's opinion provides a clear indication that the state government would have grounds to stop the games in Illinois, joining New York and Nevada, though the latter has ruled games may seek licenses.

    The opinion was sought by two members of the Illinois legislature who sit on the Criminal Committee. Rep. Elgie Sims, Jr., is chairman of the committee and Rep. Scott Drury is vice-chairman.

    “It is my opinion that the daily fantasy sports contests offered by FanDuel and DraftKings clearly constitute gambling under subsection 28-1(a) of the Criminal Code of 2012 and that the exemption set forth in subsection 28-1(b) does not apply,” Madigan wrote.

    Move to legalize?

    Unlike New York, however, Illinois may move to change state law to make the highly popular games legal. Madigan disputes the claim that daily fantasy sports are protected under a 2006 federal law, pointing out that law specifically leaves it up to the states to determine whether the games are, in fact, gambling.

    Madigan notes that legislation is currently pending in both Illinois legislature chambers to create a new act – the Fantasy Contests Act. The proposed law, Madigan says, would specifically exempt fantasy contests from the general prohibition against gambling.

    Without passage of the law, says Madigan, Illinois residents playing daily fantasy sports games are breaking the law.

    “Absent legislation specifically exempting daily fantasy sports games from the gambling provisions, it is my opinion that daily fantasy sports contests constitute illegal gambling under Illinois law,” Madigan concluded.

    In October, Nevada ordered a halt to daily fantasy sports games in the state, ruling that they are unlicensed gambling. The following month, New York Attorney General Eric Schneiderman obtained a court order prohibiting New Yorkers from playing the games, though FanDuel successfully argued for a stay, pending an appeal.

    In an opinion requested by two state legislators, Illinois Attorney General Lisa Madigan says she believes daily fantasy sports games provided by enterpris...

    Daily fantasy sports resume limited games in New York

    FanDuel wins appeal, but won't accept new deposits until a final ruling is made

    Many daily fantasy sports (DFS) players who live in New York were able to field teams over the weekend, as an appellate court granted an emergency injunction, staying a judge's order from earlier in the day that appeared to signal the end of these games.

    Confused? You're hardly to blame. With so much money at stake, the DFS enterprises of Fan Duel and DraftKings will pull out all the legal stops to keep the games alive. This high-stakes game is far from over.

    The DFS games, incredibly popular nationwide, were declared illegal gambling by New York Attorney General Eric Schneiderman, who filed suit to enforce a cease and desist order. Early in the day, it appeared that he had won.

    New York Supreme Court Justice Manuel J. Mendez granted Schneiderman's motion to enjoin DraftKings and FanDuel “from doing business in the State of New York, accepting entry fees, wagers or bets from New York consumers in regards to any competition, game or contest run on” their websites.

    Initial victory

    "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,” Schneiderman said in the aftermath of Mendez's decision. I have said from the beginning that my job is to enforce the law, and that is what happened today."

    But the celebration might have been premature. FanDuel's legal team raced to an appeals court, which suspended Schneiderman's victory, at least for the time being.

    “On behalf of our users in New York, we are pleased to report that this afternoon, an appellate court in New York granted our request for an emergency stay of the injunction issued this morning,” FanDuel said in a statement Friday. Based on the appellate court’s ruling, New Yorkers can continue to enjoy FanDuel contests while the legal process moves forward.”

    New Yorkers back in the game, sort of

    And be assured, this matter will be throughly hashed out in court. In the meantime, players who have money deposited in FanDuel can continue to play games. However, the company said it is not accepting new deposits of funds until a final decision on the legality of the enterprise is reached.

    “The Appeals Court decision is not permanent,” FanDuel pointed out. “This decision will be reviewed by a panel of judges early next month.”

    Nevada has also officially determined that both FanDuel and DraftKings are running unlicensed gambling operations, but Nevada has far fewer players than New York. The loss of revenue from the Empire State would hurt both companies, should Schneiderman's ban ultimately prevail.

    Mid November action

    Schneiderman went to court against both DraftKings and FanDuel in mid November, claiming the two companies constitute illegal gambling under state law.

    “Under New York law, a wager constitutes gambling when it depends on either a (1) 'future contingent event not under [the bettor’s] control or influence' or (2) 'contest of chance.' So-called Daily Fantasy Sports (“DFS”) wagers fit squarely in both these definitions,” Schneiderman wrote. “DFS is nothing more than a rebranding of sports betting. It is plainly illegal.”

    Schneiderman accused both companies of winking at the law, maintaining in public that they run games of skill, but privately evoking the profits of gambling to investors.

    Many daily fantasy sports (DFS) players who live in New York were able to field teams over the weekend, as an appellate court granted an emergency injuncti...