FanDuel and DraftKings forced out of New York
State judge rules in favor of Attorney General Eric Schneiderman and grants temporary restraining order blocking operators from the state
FanDuel and DraftKings have been told they must shut down their sites in New York after a state judge granted a temporary restraining order requested by the state’s Attorney General Eric Schneiderman.
Judge Manuel Mendez today ruled in favor of the AG, who is trying to permanently block daily fantasy sports operators from the state after ruling the activity met the definition of illegal gambling under New York law.
In a statement, DraftKings, who has a UK gambling licence, said it was disappointed with the ruling and will immediately file for an emergency notice of appeal in order to “preserve the status quo”.
“Daily fantasy sports 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,” the operator said.
In his ruling, Mendez said fees paid by DFS players to enter contests “could certainly be deemed risking something of value” and therefore the activity meets the definition of gambling.
“The language of Penal Law 225.00 is broadly worded and as currently written sufficient for finding that DFS involves illegal gambling,” the ruling stated.
Mendez also said the carve-out in the Unlawful Internet Gambling Enforcement Act used by DFS operators to offer contests in the US “has no corresponding authority under New York State law”.
It would appear that FanDuel and DraftKings now have 30 days to cease operating in the state, although FanDuel has already withdrawn from the market.
Mendez’s ruling comes just weeks after a hearing was held to discuss the escalating legal battle between Schneiderman and FanDuel and DraftKings.
The hearing came after Schneiderman issued cease and desist orders to FanDuel and DraftKings early November following his ruling that DFS was “illegal gambling” under state law.
Both operators subsequently filed lawsuits against the AG, who in turn filed for an injunction against the pair seeking to block them from operating in the state.
Mendez refused to give an immediate ruling following the hearing, leaving both operators in limbo until he made his announcement this afternoon.