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.
"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...