New York Attorney General Demands Shutdown of DraftKings, FanDuel

The daily fantasy sports operators have been called “illegal”

New York Attorney General Eric Schneiderman filed an injunction in the State’s Supreme Court on Tuesday that argues that daily fantasy sports sites like FanDuel and DraftKings are illegal and should be shut down.

In the preliminary statement, New York Attorney General Eric T. Schneiderman wrote that: “DraftKings, Inc. (“DraftKings”) exploits the good will associated with this game. Unlike the season-long competition played mostly for bragging rights or side wagers, DraftKings runs a casino-style gambling operation — dubbed daily fantasy sports (“DFS”)– where bettors can wager up to $10,000 per “line-up” and enter for a chance to win jackpots of more than $1 million.”

Schneiderman noted that New York state residents wagered more than $25 million on DraftKings in 2014 alone.

“While irresponsibly denying their status as gambling companies, the DFS sites pose precisely the same risks to New York residents that New York’s antigambling laws were intended to avoid,” the attorney general’s office said in a statement.

Schneiderman further asserted that the state’s constitution prohibits bookmaking and gambling and that the sites like FanDuel and Draft Kings fall under that definition.

The attorney general’s office filed a cease-and-desist order last week accusing the DFS sites of operating illegally and ordered them to stop accepting payments immediately.

FanDuel and Draft Kings fired back with its own restraining order to try and stop the attorney general from shutting them down.

“We look forward to being afforded a full and fair opportunity to demonstrate why daily fantasy sports are legal under New York State law,” a spokesperson for DraftKings said in a statement.

“We believe the attorney general’s view of this issue is based on an incomplete understanding of the facts about how our business operates and a fundamental misinterpretation and misapplication of the law.”

In their own statement, a spokesperson for Fan Duel said, “We maintain, unequivocally, that FanDuel has always complied with state and federal law. We look forward to vindicating our position in court next week.”

“We will press on and fight to ensure that your right to play fantasy sports is protected, not just in New York, but across the nation.”