Attempts to Hurdle the Court: DraftKings and FanDuel Meet With NY Lawmakers

On December 8, 2015, representatives from the daily fantasy sports (DFS) industry met at a joint hearing in Albany with New York lawmakers. The companies argued their positions on DFS before the New York Assembly standing committees on Racing and Wagering and Consumer Affairs and Protection.

DraftKings, Inc. and FanDuel, Inc. — DFS industry leaders — are awaiting a New York trial court decision on whether to enjoin the companies’ business operations. In November 2015, N.Y. Attorney General Eric Schneiderman filed a preliminary injunction motion, seeking an order finding that DFS is “illegal gambling” under New York law.

At the December 8th hearing, legal representatives of DraftKings and FanDuel contended that DFS does not involve the degree of “chance” required for an activity to constitute “illegal gambling.” DraftKings’ attorney specifically argued that DFS is not a “game of chance” because the planning and selecting involved in establishing a DFS team is a complicated process, involving an overwhelming degree of skill.

New York lawmakers have an opportunity to create legislation that permits DFS.  Such a decision would follow the footsteps of states like Massachusetts. In November, Massachusetts Attorney General Maura Healey opted to propose DFS regulations (i.e. increased consumer protections) rather than suggesting an all-out prohibition.

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