Draftkings and FanDuel settle with New York attorney general

Speculation earlier this week that daily fantasy sports market leaders FanDuel and DraftKings were about to agree a settlement on consumer fraud suits prepared by the New York AG (see previous report) was confirmed Tuesday when a $12 million settlement was announced.

The companies will cough up $6 million each on the misleading advertising claims lodged by Attorney General Eric Schneiderman; the agreed amounts include penalties and costs of the investigation.

The settlement agreement includes provisions requiring the firms to conduct reforms to marketing procedures and policies that cover clear disclosure of marketing promotional terms and conditions, potential rewards and expected performance in DFS competitions.

There is also a requirement that the percentage share of competition winnings be clearly posted, showing the top players.

In a statement announcing the settlement, Schneiderman’s office noted that it was the highest penalty of its kind in the state in recent memory.

Observers have already noted that it is probably a price worth paying for continued access to New York’s millions of DFS fans.