Reprieve for DFS firms following appeal against New York injunction
News on 12 Dec 2015
News on 12 Dec 2015
The ink was barely dry on New York judge Manuel Mendez’s order restraining daily fantasy sports firms DraftKings and FanDuel from operating in New York state (see previous report) when the two companies launched appeals…and they were successful, with an appeals court lifting the temporary Mendez injunction until the legality of DFS can be properly examined early next year.
Mere hours after Judge Mendez signed the injunction, the appeals were lodged, and the appeal court quickly ordered a stay on the Mendez restraint, which would have hobbled the DFS sites over the peak end of the year holiday season.
The appeal court decision will also prevent New York Attorney General Eric Schneiderman from taking action against the two companies pending a full hearing on the legality issue, which is expected to be scheduled for January 2016.
Following the successful appeal, DraftKings legal representative David Boies said: “We look forward to a full and fair hearing and are confident we will demonstrate clearly to the Court why we should be able to continue to offer our DFS games in New York permanently. We are encouraged by our dialogue this week with New York state legislators. We look forward to continuing that conversation.”
Another DraftKings lawyer, Randy Mastro commented: “The day has ended well and now New Yorkers who love daily fantasy sports can continue to play. The takeaway from today is these are legal questions that deserve a full airing. We believe that when we have our full day in court, we will prevail.”
The New York AG had a different view, saying in a statement: “We look forward to demonstrating to the appellate division why they should uphold today’s decision to grant a preliminary injunction barring DraftKings and FanDuel from continuing their illegal gambling operations in New York.”
In related news, online payment processor PayPal was caught short by the successful appeal, having just hours previously decided to pull the plug on DFS transactions in New York state.
The processor noted: “We have been monitoring the ongoing legal developments closely and in light of the court’s ruling we are working with our merchants to stop processing transactions related to the daily fantasy sports category in New York State. We know there are passionate voices on both sides of this issue, and we regret any disappointment this causes.”
ESPN reports that in New York state alone FanDuel and DraftKings combined had around 600,000 players this year.
January’s court hearing on DFS legality will be closely watched by several US state currently considering whether to regulate and licence the popular genre as a gambling pastime.
