New York state regulators have ordered the country’s top single-game fantasy football sites to stop operating in the state, a potentially major blow to the budding sports-fan pastime that quickly became a billion-dollar industry.
New York attorney general Eric Schneiderman wrote industry giants Draft Kings and Fan Duel in a cease-and-desist letter obtained by ESPN and ABC News that daily-fantasy football is not a game of skill, but of chance, and thus “constitute illegal gambling under New York law.”
“Each DraftKings/FanDuel wager represents a wager on a ‘contest of chance’ where winning or losing depends on numerous elements of chance to a ‘material degree,” he wrote.
Fantasy players “are clearly placing bets on events outside their control of influence, specifically on the real game performance of professional athletes.”
In a statement to ABC News, FanDuel called the ruling “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.”
Nevada made a similar ruling last month, though the New York Times reported the next week that the sites still seemed to be taking entries from that state’s residents.
But this ruling has the potential to be much more damaging than Nevada’s, despite that state’s huge gambling industry. New York is a much more populous state, and its three in-state NFL teams means it has legions of sports fans.
In addition, both Draft Kings and Fan Duel have major legal presences in New York, making them much more vulnerable to that state’s wrath than Nevada’s.
DraftKings has a sponsorship deal with Madison Square Garden and logo rights to the WNBA’s New York Liberty, while Fan Duel is actually headquartered in New York and has a sponsorship deal with the Brooklyn Nets.
According to ABC News, the letter orders Draft Kings and Fan Duel “to stop accepting ‘wagers’ from New York residents and discontinue operations in the state.”