New York AG shuts down FanDuel and DraftKings

In a major blow to the daily fantasy sports (DFS) industry, New York State Attorney General, Eric T. Schneiderman, has issued a cease-and-desist order against DFS giants FanDuel and DraftKings following a month long inquiry into the two companies.

DraftKings and FanDuel have been ordered to stop taking bets from New York State residents with immediate effect.

According to the New York Times, legal experts expect the action to reverberate in other States where lawmakers are already focusing on the industry.

“It is clear that DraftKings and FanDuel are the leaders of a massive, multibillion-dollar scheme intended to evade the law and fleece sports fans across the country,” Schneiderman said during a press conference Tuesday.  “Today we have sent a clear message: not in New York, and not on my watch.”

Schneiderman went on to say that his office’s investigation had concluded that fantasy sports was a chance based game rather than skill and that conclusion formed the basis of his illegal gambling claim.

In a strongly worded rebuttal FanDuel said:

“Response to New York Attorney General’s Letter
The New York Attorney General has sent a letter asking for daily fantasy operators, like FanDuel, to cease and desist operations in the State of New York.

“Fantasy sports is a game of skill and legal under New York State law. This is a politician telling hundreds of thousands of New Yorkers they are not allowed to play a game they love and share with friends, family, coworkers and players across the country.

“The game has been played — legally — in New York for years and years, but after the Attorney General realized he could now get himself some press coverage, he decided a game that has been around for a long, long time is suddenly now not legal. We have operated openly and lawfully in New York for several years. The only thing that changed today is the Attorney General’s mind.”

DraftKings’ issued a statement to its players saying:

“Attorney General Eric Schneiderman is considering preventing New Yorkers from playing daily fantasy sports.

“Hey, New York, protect your right to keep playing daily fantasy sports. Contact the attorney general today!”

And in response to the New York Times, spokeswoman for DraftKings, Sabrina Macias, said:  “We’re disappointed he [Schneiderman] hasn’t taken the time to meet with us or ask any questions about our business model before his opinion,”  an account attorney general spokesperson Eric Soufer disputes saying there were multiple meetings between the A.G.’s office and DraftKings.

DraftKings concluded by saying: “We strongly disagree with the reasoning in his [Schneiderman’s] opinion and will examine and vigorously pursue all legal options available.”

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