The legality of Daily Fantasy Sports is now officially in question in the state of New York. New York’s Attorney General Eric T. Schneiderman has issued cease-and-desist letters to DraftKings and FanDuel, demanding that companies stop accepting illegal wagers in New York States. New York is home to premier teams such as the Yankees, Giants, Rangers, and Knicks, with some of these teams already partnered up with these companies. So as the Knicks play games with a huge DraftKings sign featured on the court, their state legislation is fighting to ban it in the state.
Schneiderman stated the following in his letter. “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 fan across the country. Today we have sent a clear message: not in New York, and not on my watch.”
The Attorney General’s office’s investigation also found both DraftKings and FanDuel consistently uses deceptive advertising to lure consumers into an unregulated online gambling operation that, while marketed as a game that anyone can win, in fact distributes the vast majority of winnings to a small subset of experienced, highly sophisticated players. These winners make up roughly 1% of all players on both sites. The investigation also revealed both companies deliberately target demographics susceptible to problem gambling.
These daily fantasy sports site seem to be a huge player in the sports industry moving forward. Is it possible that a New Yorker may bypass Yankees tickets in favor of watching all the games at home so they can track their DraftKings players that night? New York state is making the case that this is still gambling, it is still illegal, and the system is hurting their citizens. It will be interesting to see how far and how long this case goes on for.