DraftKings and FanDuel remain operational following the most recent DFS New York court ruling… But only for the time being.
In US gambling news, there’s been another new development in the ongoing saga of daily fantasy sports (DFS) operators DraftKings and FanDuel versus New York Attorney General Eric Schneiderman. Schneiderman won the most recent round, with Supreme Justice Manuel Mendez ruling that DFS is a form of gambling and that neither company is permitted to conduct business in the state of New York any longer.
However, the DFS operators were not going to go down that easy. DraftKings sought an emergency stay, which was supported by appellate judge Paul Feinman. As a result, both DraftKings and FanDuel are permitted to continue operating in New York until January 4th, after which the legal battle with Schneiderman will recommence.
What will be the outcome of the next DFS New York case ruling?
The future does not look bright for DraftKings and FanDuel, whose claims that their DFS sites do not constitute as online gambling sites in the US were ruthlessly shot down in the most recent DFS New York case ruling. Mendez had highlighted New York Penal Law section 225.00 in court, which defines ‘contests of chance’ as “any contest, game, gaming scheme, or gaming device in which the outcome depends in a material degree upon an element of chance, notwithstanding that skill of the contestants may also be a factor therein.”
Mendez delivered a punch to the DFS operators when he added that: “The language of Penal Law 225.00 is broadly worded and, as currently written, sufficient for finding that DFS involves illegal gambling.”
FanDuel and DraftKings tried to use the Unlawful Internet Gambling Enforcement Act (UIGEA) to defend their operations but Mendez countered that “UIGEA language exempting fantasy sports has no corresponding authority under New York State law as currently written.” Their argument regarding how long they’d been operational in New York without issue was also rejected.
Says David Boies, counsel to DraftKings and chairman of Boies, Schiller & Flexner, of the DFS New York case ruling: “We are disappointed with the Court’s decision, and will immediately file an emergency notice of appeal in order to preserve this status quo. Daily fantasy sport contests have been played legally by New Yorkers for the past seven years and we believe this status quo should be maintained while the litigation plays out.”