If you’ve watched sports on television, been to a live game or walked around any major city, it is very likely that you have spotted an advertisement for “FanDuel” and “Draftkings.” The two companies are the biggest sports gaming services in the world. In the past, both have come under fire from elected officials claiming that the services provides a platform for illegal sports betting.
Owners of the companies and users have cited the Unlawful Internet Gambling Enforcement Act of 2006, arguing that the services they provide are “not” gambling, instead a game of skill. New York State Attorney General Eric Schneiderman thinks differently and has sent cease-and-desist orders to FanDuel and DraftKings, ordering them to not include users from New York in their services.
In a letter, Schneiderman wrote:
Our review concludes that DraftKings’/FanDuel’s operations constitute illegal gambling under New York law[…] each DraftKings/FanDuel wager represents a wager on a ‘contest of chance’ where winning or losing depends on numerous elements of chance to a ‘material degree.
Both companies have stated that they will be awarding a combined $3 Billion to winners for 2015. FanDuel issued a statement refuting the claims and denouncing Schneiderman in the process.
Fantasy sports is a game of skill and legal under New York State law. This is a politician telling hundreds of thousands of New Yorkers they are not allowed to play a game they love and share with friends, family, coworkers and players across the country. The game has been played — legally — in New York for years and years, but after the Attorney General realized he could now get himself some press coverage, he decided a game that has been around for a long, long time is suddenly now not legal. We have operated openly and lawfully in New York for several years. The only thing that changed today is the Attorney General’s mind.
Back in October of this year, the Nevada Gaming Control Board ruled that daily fantasy games such as these constitutes as sports gambling and required them to acquire a license to operate within the state. Both immediately stopped doing business in the state of Nevada. With New York potentially being next on the chopping block, it can put a huge dent in both companies profits considering that New Yorkers make up most of their users as opposed to any other state.