Fantasy Sports For Money Is Illegal In New York
DraftKings and FanDuel have been aggressive in the approach to become the leaders in gaming and fantasy sports in the US, but their battle just became more complicated in NY. Acting Supreme Court Justice Gerald Connolly ruled late in favor of the state’s 2016 law. He declared daily fantasy sports directly violate the gambling ban in the state constitution. The ruling was in response to a lawsuit filed by antigambling organizations.
“[Interactive fantasy sports] participants have no control whatsoever of the performance of the selected players, though the experience, research, and related skill involved in selecting an IFS team can sharply impact an IFS participant’s chances of prevailing,” Connolly wrote in his decision. “As such, the first legislative finding proffered, that is, the rationale for why ‘IFS is not a game of chance,’ does not lead to the conclusion that there is not, to a material degree, an element of chance to IFS competition.”
An appeal is likely coming
With Connolly’s ruling DraftKings and FanDuel will have to shut down their operations in New York, at least until the state appeals. They won’t be able to host any players from New York. If the state appeals, it would allow the companies to continue to submit their games in New York while the court proceedings move forward. “What the judge said is that the law that the Legislature passed purporting to legalize daily fantasy sports was unconstitutional and that daily fantasy sports is definitely gambling,” said Neil Murray, an Albany-based attorney, who filed the lawsuit with help from Stop Predatory Gambling, a national anti-gambling group.
New York’s Gaming Commission is reviewing the decision. This is not new for either side. In 2016, FanDuel and DraftKings suspended their operations in New York as part of a settlement with then-Attorney General Eric Schneiderman. But later that same year the state lawmakers allow them to get back in business saying fantasy sports are not “games of chance.”
“We are pleased that the court upheld the New York legislature’s decision to decriminalize daily fantasy sports contests and that DraftKings can continue to offer their services to players. We are continuing to study the court’s decision invalidating the regulatory structure and are committed to working with the legislature” said David Boies, the attorney representing DraftKings. FanDuel had their own statement after the ruling.
“The decision makes clear that the New York legislature’s decision to exclude fantasy contests from the definition of illegal gambling cannot be challenged in court. Accordingly, we will continue to offer fantasy sports to New Yorkers. We also believe in the benefits of regulation and will cooperate with efforts to permanently restore regulatory oversight.” The state Gaming Commission has been working on regulations to allow sports gambling to be regulated in 2019, in New York. New Jersey is all in with their gambling approach, but their neighbors don’t seem to want a part of the cake. Even if New York’s daily fantasy sports generate around $5 million in annual taxes, according to the New York State Gaming Commission.