• Daily Fantasy Sports Companies Wait on NY Decision

    10 December 2015

    New york

    Daily fantasy sports have been having a really hard time over the past couple of months. It started off with a handful of states deciding that the service was against their online gambling and/or sweepstakes laws, and then there was the scandal. This scandal involved a DraftKings employee using inside information to pull six figures in winnings in one weekend at FanDuel. Now they're facing an injunction from the Attorney General of New York, and the court case surrounding it is going to be a critical point for the industry in North America.

    The Source of the Issue

    Attorney General Eric Schneiderman filed an application for an injunction in mid-November that would force DraftKings and FanDuel out of the New York market. While FanDuel decided to just move along and stop accepting NY players, DraftKings has contested the issue and taken them to court. Judge Manuel Mendez is overseeing the case, and he has already heard arguments from both sides. He's expected to make a decision anytime on this issue.

    Schneiderman's argument centers on the idea that daily fantasy sports is predominantly chance-based, and that would make it illegal to play online in the state of New York. DraftKings contends that it's skill-based. The issue between the skill-based and chance-based nature of the game was bound to happen sooner or later, since it's the key criterion used to determine the legality of certain types of wagering in many states. Now it's happening on one of the largest stages in the US District Court for the Southern District of New York.

    Implications of the Case

    Under New York's rules, something like online slots would clearly be illegal, but playing in a paid chess tournament would be clearly legal. A lot of other games fall somewhere between the two on the spectrum.

    This is also a case where the fantasy sports carve-out in the UIGEA doesn't help the daily fantasy companies because state law can still make something illegal if it has a carve-out in that particular act. What this means is that this single court case could be the most important ruling that we've seen so far in the DFS industry, and the decision could impact the entire future of the industry as well since other states will likely follow New York's lead on the skill vs. chance debate.

    Related News

    • New york

      Poker News

      Bill for Online Poker in New York Gets Traction08 February 2016

      The situation with online poker in the United States is extremely tricky. Because the game is unlikely to be regulated on a national level, it's up to the states to regulate things one at a time. New York has been one of the states putting up the most resistance to regulating the industry, but a recent development has put players in a position of being a bit more hopeful than before.

      Read full article
    • New york court

      Gambling News

      New York Supreme Court Lawsuits for DFS Juggernauts16 November 2015

      Daily fantasy sports hasn't been doing so well over the past couple of months. After a scandal broke loose when a DraftKings employee used insider information to pull about $300,000 in winnings from FanDuel, they have been under fire from virtually every direction. After New York Attorney General Eric Sniederman pressed a cease-and-desist order on them, they have struck back with individual lawsuits in the Supreme Court of the state of New York. The Legality of Daily Fantasy Sports

      Read full article
    • Onlinepokerny

      Poker News

      Online Poker to Be Discussed for New York11 September 2015

      A four-hour session for the Senate Racing, Gaming and Wagering Committee is due in New York to discuss the future of Internet poker in the state. In a session being called "Discussing the Future of Online Poker in New York State," lots of expert witnesses are going to be called to testify and give the state senate something to think about. One of the key individuals due to be called is John Pappas, the executive director of the Poker Players Alliance (PPA for short).

      Read full article