Suit Claiming Daily Fantasy Sports Law is Unconstitutional Continues

A group of citizens’ suit against the New York Attorney General and New York Gambling Commission was allowed to continue after a New York Judge denied the defendants’ motion to dismiss the case. The plaintiffs, a group that claims they are victims of gambling and are opposed to the proliferation of gambling, claimed the law legalizing daily fantasy sports is in violation of New York State’s constitutional prohibition on gambling expansion.

The group of citizens claimed that the law allowing daily fantasy sports to be considered games of skill instead of gambling is not an easily drawn distinction. The citizens claimed that although there is some skill involved in picking a roster, the outcome is based on chance. The defendants moved to dismiss the case because they claimed the state legislature had the authority to determine that interactive fantasy contests fall outside the state’s legal definition of gambling and plaintiffs cannot show it is irrational. Their motion was supported by evidence that showed the daily fantasy sports contests involved a degree of knowledge and skill and the outcomes are based on a statistical aggregation of individual performances.

The judge held that the case should continue because giving the legislature substantial freedom to determine what constitutes gambling does not require a dismissal of the plaintiff’s complaint. Instead, the judge determined that the argument was better suited for a motion for summary judgment at a later point in the case, not on a motion to dismiss.

Two daily fantasy sports contests sites, DraftKings Inc. and FanDuel Inc., were previously protected by the law that legalized daily fantasy sports when in the midst of a suit brought against them for gambling. A spokesman for the two companies stated that although they respect the court’s decision to allow this case to proceed, they do ultimately expect a decision upholding the legalization of daily fantasy sports. They also expect the Attorney General to enforce and defend the law as constitutional. DraftKings and FanDuel will have to wait until the final resolution of the case to find out if their expectations will be true.

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