New York Tells Daily Fantasy Sports Sites To Stop Doing Business In StateEmpire State Follows Nevada In Saying Sites Are Illegal Gambling |
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The state of New York on Tuesday issued cease-and-desist orders to DraftKings and FanDuel, the two largest daily fantasy sports sites. The move comes just weeks after Nevada told the companies they couldn’t do business with Nevadans unless they receive a sports book license.
New York becomes the seventh state to ban DFS sites. Arizona, Louisiana, Iowa, Montana, Washington (State) also don’t allow the popular sites.
Eric Schneiderman, the attorney general of New York, said, according to The New York Times: “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. Today we have sent a clear message: not in New York, and not on my watch.”
FanDuel is based in New York, while DraftKings’ headquarters are in Massachusetts. The order doesn’t mean FanDuel needs to physically leave the state, but it can’t offer its product to New York residents. The state has a population of roughly 19.75 million.
DraftKings said in a statement that it’s “very disappointed” with the decision. “We strongly disagree with the reasoning in his opinion and will examine and vigorously pursue all legal options available to ensure our over half a million customers in New York state can continue to play the fantasy sports games they love,” the company said.
“New York’s actions today are an unfortunate example of a state government stifling innovation, technology and entrepreneurship,” DraftKings added.
FanDuel respond similarly in a statement: “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, co-workers and players across the country.”
According to Eilers Research, daily fantasy games will generate around $2.6 billion in entry fees this year and grow by 41 percent annually. The market could reach $14.4 billion in 2020, but that was an estimate before Nevada and New York banned the sites.
More than 56 Americans play some kind of fantasy sports.
While the aforementioned states have gone the route of banning the sites, the states of New Jersey, Illinois, California, Indiana, Florida, Pennsylvania and Massachusetts have indicated interest in regulation instead. There is strong interest to have the games help the casino industry.
New York made headlines in early October when it announced that it was beginning an inquiry into DFS after reports of employees at DFS companies allegedly winning big paydays thanks to having access to insider information. The DFS industry eventually found that no misconduct had taken place.
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