DraftKings and FanDuel Banned in New York
New York's attorney general has ordered DraftKings and FanDuel to stop taking entries in his state, ruling that they constitute illegal gambling.
New York’s attorney general has ordered DraftKings and FanDuel to stop taking entries in his state, ruling that they constitute illegal gambling.
NYT (“Attorney General Tells DraftKings and FanDuel to Stop Taking Entries in New York“):
The New York State attorney general on Tuesday ordered the two biggest daily fantasy sports companies, DraftKings and FanDuel, to stop accepting bets from New York residents, saying their games constituted illegal gambling under state law.
The cease-and-desist order by the attorney general, Eric T. Schneiderman, is a major blow to a multibillion-dollar industry that introduced sports betting to legions of young sports fans and has formed partnerships with many of the nation’s professional sports teams.
Given the New York attorney general’s historic role as a consumer-protection advocate, legal experts said the action was likely to reverberate in other states where legislators and investigators are increasingly questioning whether the industry should operate unfettered by regulations that govern legalized gambling.
“It is clear that DraftKings and FanDuel are the leaders of a massive, multibillion-dollar scheme intended to evade the law and fleece sports fans across the country,” Mr. Schneiderman said, adding, “Today we have sent a clear message: not in New York, and not on my watch.”
Fantasy sports companies contend that their games are not gambling because they involve more skill than luck and were legally sanctioned by a 2006 federal law that exempted fantasy sports from a prohibition against processing online financial wagering. That view is being challenged as fantasy sites have begun offering million-dollar prizes and bets on individual sports, such as golf, mixed martial arts and Nascar races, magnifying the element of chance and making the exemption more difficult to defend.
I’m surprised it’s taken this long for authorities to put a stop to the practice. The advertisements for the games, widespread on football telecasts, make it clear that they’re being touted as get-rich-quick schemes.