A decision that could harm DraftKings and FanDuel

Daily fantasy sports are gambling, NY judge rules

The decision knocked down a 2016 state law that said the offerings of sites like DraftKings and FanDuel were permitted games of skill.
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Since, the state constitution bans any form of gambling, a court decision issued Friday by a state judge in Albany dealt a blow to New York’s fantasy sports businesses, by ruling their daily contests were a form of wagering.

The decision knocked down a 2016 state law signed by Gov. Andrew Cuomo that said the offerings of sites like DraftKings and FanDuel were permitted games of skill, Marketwatch reports. The immediate effect of the ruling for these sites, however, is unclear.

Both companies allow players to buy into pools where they build fantasy rosters of sports figures and win prizes based on how they perform. They said the games aren’t gambling because they relied on players’ skill.

Legislation was introduced and enacted after former Attorney General Eric Schneiderman sued the companies in 2015. In court filings that year, FanDuel estimated it had 600,000 users in New York — about 10% of its total customer base.

Schneiderman’s case was put on hold to give lawmakers a chance to act, and Cuomo, a Democrat, signed the bill in August 2016. The law declared that daily fantasy sports were “not games of chance” and “do not constitute gambling” under the state’s penal law. However, four antigambling advocates sued in 2017. Acting Supreme Court Justice Gerald Connolly said in his ruling on Friday that an 1894 amendment to the state constitution gave a broad definition of prohibited gaming activities, so although daily fantasy sports contests are “predominated by skill rather than chance,” they are indeed gambling.

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