New York Rules Daily Fantasy Sports Illegal GamblingAppellate Court Upheld Lower Court Ruling That DFS Contests Were Unconstitutionally Ruled A Game Of Skill |
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New Yorkers that participate in daily fantasy sports contests can’t be happy after an appellate court ruled Thursday that those contests are not considered a game of skill and are considered illegal gambling by state law.
The appellate court upheld a lower court ruling that the New York State legislature unlawfully authorized the games by classifying it as a game of skill.
According to Reason, the state constitution contains a ban on most forms of gambling. But in 2016, Gov. Andrew Cuomo signed legislation passed by state lawmakers that would shield five daily fantasy sports operators from the ban.
A 2016 report by the New York Times said that those companies would be shielded from the state ban on gambling in exchange for millions.
“Companies will pay the state equivalent of 15.5 percent of their revenue to operate, an amount that supporters have estimated to be nearly $6 million a year. Funds collected by the state will be directed to an education fund run by the state lottery,” the report read.
Despite classifying the contests as games of skill, the legislation gave the state gaming commission the power to regulate the sites. According to Fox Business, the gaming commission website still read that the contests were considered games of skill after the court had ruled otherwise.
The country’s biggest gambling market, Nevada, also ruled that daily fantasy contests were considered games of chance and are not currently allowed unless those sites want to register with the Silver State’s gaming commission.
In the past, the major operators were experiencing massive growth throughout the rest of the country while marketing themselves as games of skill to regulators. Those companies declined to register with the gaming commission as a game of chance since it would hurt negotiations with regulators in other states.
Oregon, Idaho, Montana and Arizona also do not allow daily fantasy sports.
FanDuel and DraftKings both released statements in response to the development in New York.
“We expect that there will be an appeal and we’ll be able to continue to offer contests while that appeal is decided,” said FanDuel.
“The legislative action authorizing fantasy sports in New York was constitutional and in the best interests of taxpayers and fantasy sports fans,” said DraftKings.
According to appellate court journalist Rob Rosborough, daily fantasy sports contests will continue for the immediate future. The outlook over a longer time frame, however, is much murkier.
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