April 4, 2016 Fantasy Sports / Legislation

A Wait-and-See Approach: Federal Prosecutors Waiting to See What States Do With Fantasy Sports

The game of chance versus game of skill debate is nothing new in the realm of the daily fantasy sports industry. But on Friday, April 1, 2016, the U.S. Attorney for the Eastern District of Pennsylvania, Zane Memeger, indicated his office’s intent to see how states resolve the question of whether or not companies like DraftKings or FanDuel are violating anti-gambling laws:

From the Department of Justice’s perspective, we’re waiting to see what the states are going to do with fantasy sports, in terms of …

March 22, 2016 Fantasy Sports

DraftKings and FanDuel Agree to Stop Paid Contests in New York

A major change has been made in the New York world of fantasy sports. New York Attorney General Eric Schneiderman made an agreement with DraftKings and FanDuel in which the companies agree to immediately stop operating paid contests in New York.

In November, Schneiderman sent cease and desist letters to the fantasy sports companies alleging the contests are games of chance and constitute illegal gambling under New York law. A preliminary injunction was granted against the companies in December; however, an immediate appeal stayed the …

March 11, 2016 Fantasy Sports

DraftKings Taking Texas to Court Following AG’s Opinion Letter

On Friday March 4, 2016, daily fantasy sports giant DraftKings filed suit in Texas state court against Texas’ attorney general over an opinion letter released in January by AG Ken Paxton declaring DFS constitutes illegal gambling. The filing was initiated shortly after the attorney general’s office announced it had reached a settlement with DraftKings’ ultra-competitor FanDuel to cease operations of paid entries in Texas.

In a 43-page petition, DraftKings asked the court for declaratory judgment, seeking it to rule that DFS games are one of …

February 9, 2016 Fantasy Sports

Citigroup to Block New Yorkers’ Payments to DraftKings, FanDuel

On February 5, 2016, a week after a major payment processor completely backed out of the daily fantasy sports (DFS) market, Citigroup announced that it will begin blocking its New York residents’ credit and debit card payments on the websites of DraftKings, Inc. and FanDuel, Inc. The two companies are the current DFS industry leaders.

Since insider trading claims were alleged against DraftKings and FanDuel in October 2015, a national debate has arisen questioning whether DFS is legal on a state-to-state basis. Each state has …

February 8, 2016 Fantasy Sports

A Change of Pace: Rhode Island AG Finds Daily Fantasy Sports Legal

Whether daily fantasy sports (DFS) are legal is an issue that has been debated nationally since October 2015, when DFS industry leaders DraftKings, Inc. and FanDuel, Inc. were accused of engaging in insider trading. On February 4, 2016, Rhode Island Attorney General Peter Kilmartin released an advisory opinion concluding that DFS is likely to be found legal in a state court.

Under current law in many states, DFS wagering arguably constitutes “unlawful gambling.” Since October 2015, state attorney generals across the country have been …

February 6, 2016 Fantasy Sports

Class Actions v. DraftKings, FanDuel to be Consolidated in Massachusetts

Following the alleged October 2015 insider trading scandal involving daily fantasy sports (DFS) industry giants DraftKings, Inc. and FanDuel, Inc., a slew of consumer-based class actions were filed against the two companies.

In December 2015, DraftKings and FanDuel agreed with the plaintiffs that the cases should be consolidated in a single jurisdiction. Both companies argued before the Judicial Panel on Multidistrict Litigation that the consolidation should occur within the U.S. District Court of Massachusetts, where DraftKings is headquartered.

The Panel ultimately agreed with DraftKings and …

February 5, 2016 Fantasy Sports

Indiana Bill to Legalize Daily Fantasy Sports Passes in State Senate

A bill to expressly legalize daily fantasy sports (DFS) in Indiana was passed by the state Senate on February 3, 2016. The bill was passed with ease, and it will now move before the Indiana House of Representatives, where it must survive another voting round before becoming official law.

The Indiana bill follows an alleged September 2015 insider trading scandal between DFS industry leaders DraftKings, Inc. and FanDuel, Inc. The scandal sparked a national debate questioning the legality of online DFS betting.

Under the definitions …

February 2, 2016 Fantasy Sports

Daily Fantasy Sports Payment Processor Vantiv Entertainment Cuts Ties with Industry

Daily fantasy sports (DFS) industry giant DraftKings, Inc. has acknowledged a recent report that Vantiv Entertainment Solutions, one of the company’s payment processors, is cutting ties.

The report was made by the New York Times on January 29, 2016. Vantiv not only provides payment processing for DraftKings but also for a number of DFS companies, including FanDuel, Inc., DraftKings’ leading competitor. Vantiv plans to end its business with all DFS clients by February 29, 2016.

The processing company’s decision to cut ties with DFS is …

January 25, 2016 Fantasy Sports

Action in Daily Fantasy Sports Controversy Continues: DraftKings Changes User Rules and IL AG Files Motion to Dismiss

Action in the daily fantasy sports (DFS) controversy continued last week: DraftKings, Inc. changed its user rules, and DFS litigation faces a motion to dismiss from the Illinois attorney general.

In October 2015, an insider trading scandal was alleged against DraftKings and FanDuel, Inc. — the industry leaders in DFS. Thereafter, the companies faced government scrutiny and a myriad of consumer-based class action lawsuits. Currently at issue in states across the country is whether DFS violates state and federal anti-gambling laws.

In several class action …

January 22, 2016 Fantasy Sports

Steiner v. DraftKings, FanDuel Will Remain in Federal Court

On January 21, 2016, a Florida federal district court judge in the case of Steiner v. DraftKings, & FanDuel denied the plaintiff’s request to remand the action back to state court. The action claims the defendants are operating unlawful gambling businesses under Florida state law.

The plaintiff, Nelson Steiner, originally filed the complaint in state court, under Florida’s Sixth Circuit Court. Defendants DraftKings, Inc. and FanDuel, Inc., industry leaders in online daily fantasy sports gambling, subsequently removed the case to federal court based on diversity …