NY Attn. Gen. Schneiderman Amends Complaints v. DraftKings, FanDuel on Eve of Appellate Hearing

Following the New York trial court’s ruling to grant NY Attorney General Eric Schneiderman’s preliminary injunction motion, DraftKings and FanDuel — the industry leaders in daily fantasy sports (DFS) — immediately appealed. The appellate division granted the companies an interim stay of the preliminary injunction, as well as an expedited hearing date for the appeal, which was scheduled for January 4, 2016.

At issue in New York is whether DFS constitutes unlawful gambling under current state laws. AG Schneiderman believes it does. The DFS companies obviously argue otherwise. The issue is part of a national debate, and one in which DraftKings and FanDuel are facing mountains of legal trouble.

On December 31, 2015, days before the expedited appellate hearing, Schneiderman filed amended complaints against DraftKings and FanDuel. In addition to the original relief, which requested a permanent ban of DraftKings and FanDuel operations in New York State, Schneiderman now demands the companies pay restitution and damages for their alleged illegal gambling operations. In sum, the AG believes the companies should pay for what he calls “fraudulent and deceptive” advertising acts.

The amended complaint will have no effect on the appellate court’s decision on whether to reverse the preliminary injunction. Oral arguments were heard on January 4, 2016 as scheduled, and the appellate decision on preliminary injunction is pending.

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