Daily fantasy sports giants DraftKings and FanDuel have been granted stays by a New York appellate court panel today. The court’s action halts a lower court decision earlier that would have ended the companies’ business dealings in the state. The lower court ruling was in response to a legal action filed earlier by New York Attorney General Eric Schneiderman.
David Boies, counsel to DraftKings and Chairman, Boies, Schiller and Flexner LLP released a statement soon after the ruling saying, “We are pleased with the Court’s ruling today. Daily Fantasy Sports (DFS) contests are as legal now as they have been for the past seven years that New Yorkers have been playing them. As our litigation continues, we expect an appellate court to see what we have known since the outset: DFS is a game of knowledge and skill, one that builds community and whose competitive spirit has become important to the lives of millions of people. Our ongoing appeal will make clear that daily fantasy contests require just as much skill as season-long contests, which the Attorney General recognizes as perfectly legal under state law.
“We are engaged with legislatures and Attorneys General across the country, including in New York, to ensure that our fans are able to experience our contests in a fun and fair way with appropriate and thoughtful consumer protections in place. This includes active collaboration with the Attorney General in Massachusetts, where we are working to become the industry leader in transparency and consumer protection. We will continue in these efforts so that fans can keep enjoying Daily Fantasy Sports for years to come.”
Attorney General Eric Schneiderman entered the fray in early October pronouncing the practice of DFS contest wagering “illegal gambling”. Soon after, legal motions were filed. So far the DFS companies have prevailed, at least in procedural maneuvers, to have their issues determined in a full court of law, rather than by administrative actions of New York’s top cop. AG Schneiderman’s latest maneuver was to go directly to the sports site’s wallet in an attempt to break them financially.
On December 31st the AG amended his complaint against the companies to include civil penalties including as much as $5,000 for every alleged violation of NY business law and a refund of about $200 million to more than half a million New Yorkers who have paid entry fees into the contests.
Today’s stay order by the appellate panel does not affect the civil complaint which will presumably go forward at a later date.