NY Attorney General Orders DraftKings, FanDuel Shut Down in NY
New York Attorney General Eric Schneiderman ordered the shut down of fantasy football sites DraftKings and FanDuel on Tuesday. Schneiderman determined sites to be illegal gambling enterprises .
Schneiderman’s office said in a statement,
“Our investigation has found that, unlike traditional fantasy sports, daily fantasy sports companies are engaged in illegal gambling under New York law, causing the same kinds of social and economic harms as other forms of illegal gambling, and misleading New York consumers.
Daily fantasy sports is neither victimless nor harmless, and it is clear that DraftKings and FanDuel are the leaders of a massive, multi-billion-dollar scheme intended to evade the law and fleece sports fans across the country.
“Today we have sent a clear message: not in New York, and not on my watch.”
The NY Daily News reports that the entry fees on DraftKings range from a mere 25 cents to more than $5,000. Some prizes can be over $1 million.
DraftKings and FanDuel have said that their sites provide games of skill and not of chance. The creators of the sites say that they are protected by the Unlawful Internet Gambling Enforcement Act established in 2006, which has language protecting fantasy sports.
The Department of Justice and the FBI are reportedly investigating the business model of both companies. The sites charge customers an entry fee to draft fantasy sports teams to compete against other customers’ fantasy squads for a chance to win a lot of money. But have they violated federal laws in any way?
Both companies defended their sites and expressed disappointment in AG Schneiderman's ruling. In a press release on their website, FanDuel posted:
“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. ... We have operated openly and lawfully in New York for several years. The only thing that changed today is the Attorney General’s mind.
New York becomes the second state after Nevada to ban the fantasy sites. The games are legal in 45 states.