Daily fantasy sports market leaders in new bid to extend appeal court protection
News on 5 Jan 2016
News on 5 Jan 2016
Daily fantasy sports market leaders DraftKings and FanDuel filed a new motion Monday urging New York appellate division judges to extend the temporary stay on Superior Court Judge Mendez’s injunction halting DFS activity in New York pending a decision on its legality (see previous reports).
The companies are asking for the stay (which enables them to keep operating in New York) to be extended to April 2016 when a full judicial hearing on legality issues will be conducted.
The filing includes allegations that New York Attorney General Eric Schneiderman – the state official driving the initiative against DFS in New York – is using “smear tactics and speculation” by associating DFS with a range of undesirable activity that goes from “child abuse to overeating.”
The high profile and aggressive DraftKings legal representative, Randy Mastro, claims: “Rather than identify the concrete and immediate harms necessary… the NYAG instead resorts to smear tactics and speculation. The Attorney General’s armchair sociology would not pass muster on a daytime talk show.”
Another DraftKings lawyer, David Boies, said in a statement: “Our arguments remain strong and we are confident in our appeal for four simple reasons:
“The Attorney General has still offered no evidence that supports a preliminary injunction;
“Daily fantasy sports contests are not gambling – their outcome is controlled by the knowledge and skill of DFS players – that’s how you win or lose;
“The only difference between a daily and a season-long fantasy contest is how long it lasts and the Attorney General has said that season-long fantasy sports contests are lawful;
“It is legal for skills-based contests to charge entry fees and award prizes to participating contestants. A DFS player exercises “control and influence” over whether they win a prize by their choice of a roster which is without a doubt a skills-based exercise.”
The companies have appealed for the judiciary to “preserve the status quo” by allowing them to continue offering daily fantasy sports contests in New York
In its filing, DraftKings accuses the state’s attorney general, Eric Schneiderman, of a “rush to judgement” when he sought an emergency order to have fantasy sports games banned immediately as illegal gambling.
If it were shut out of New York it would be unable to provide its 375,000 New York players with its popular services, DraftKings pointed out, noting that such a shutdown would also inflict millions of dollars in lost business while irreparably harming the company’s relationships with investors and business partners that have invested hundreds of millions of dollars over the past four years.
The New York market is lucrative, accounting for about $100 million in player entry fees to DraftKings alone last year, the company advises.
Accusing the New York AG’s Office of years of “silent indifference” to DFS, the DraftKings filing claims that fantasy sports games “have been offered openly, honestly, and permissibly in New York for nearly a decade; and if the NYAG had actual evidence that they caused public harm, he would have identified it in his brief. There is none.”
DraftKings also claims that Judge Mendez made a series of legal errors in granting the New Yoirk AG’s request for a temporary injunction against the DFS companies.
