Last week, New York State Attorney General Eric Schneiderman ordered the two largest daily fantasy sports companies to stop operating in New York because their operations violate the state’s gambling laws. The AG’s action follows an investigation by his office which found that DraftKings and FanDuel are in violation of New York State law against illegal gambling. He also said that his investigation “found that both companies consistently use deceptive advertising to lure consumers into an unregulated online gambling operation that, while marketed as a game that anyone can win, in fact distributes the vast majority of winnings to a small subset of experienced, highly sophisticated players.”

 

Attorney General Schneiderman said:

 

“Our investigation has found that, unlike traditional fantasy sports, daily fantasy sports companies are engaged in illegal gambling under New York law, causing the same kinds of social and economic harms as other forms of illegal gambling, and misleading New York consumers.  Daily fantasy sports is neither victimless nor harmless, and it is clear that DraftKings and FanDuel are the leaders of a massive, multi-billion-dollar scheme intended to evade the law and fleece sports fans across the country.  Today we have sent a clear message: not in New York, and not on my watch.” 

 

Earlier today, DraftKings and FanDuel each filed lawsuits in in Manhattan asking the court to rule that the Attorney General’s effort to stop their operations in the state is “unconstitutional, an abuse of discretion, and simply wrong.”