New York: Rivers Casino case against daily fantasy sports fails to gain traction

Rivers Casino & Resort in Schenectady had intended to further its argument that daily fantasy sports games violate the state Constitution, as a New York Supreme Court justice ruled last year, but an Appellate Division decision has declined to grant them standing to make their case.

The state attorney general's office and proponents of the industry, which is dominated by DraftKings and FanDuel, maintain a constitutional amendment is not needed because the games don't constitute gambling due to the role skill plays in winning, the Times Union reports.

Rivers believes their argument is off base and that the court action has not addressed the broader definition of gambling in the state Constitution.

"Whether (daily fantasy sports) is viewed as a game of skill or chance ... it is still unauthorized 'gambling' as that term is used in the Constitution," wrote the casino's attorneys.

Rivers' interest in the appeal stems from their belief that the case has "important implications" for their business, which began offering on-site sports gambling last month.

Studies show there is an overlap between the type of consumers interested in sports wagering and daily fantasy sports, suggesting a competition for spending. Additionally, DraftKings and FanDuel have partnered with casinos in western and central New York, respectively, to offer sports wagering.

Rivers also noted in its brief that the state's gambling landscape operates under the assumption that their operations require constitutional approval.

"The entire landscape of New York gambling regulations would be thrown into flux if, by mere legislative enactment, any game involving skill could be exempted from (prohibitions in) the Constitution," Rivers' attorneys wrote.

They added that type of system "would be susceptible to political winds and legislatively-selected winners and losers."

Rivers' parent company, Rush Street Gaming, has butted heads with DraftKings and FanDuel in Illinois, where they pushed for a provision that would keep the companies out of the sports gambling business.

The decision not to accept the casino's brief is rare for a state appellate court, according to an analysis written by Rob Rosborough, a litigation partner at Whitman Osterman & Hanna in Albany.

"The only time that I remember seeing a New York appellate court turn away a proposed amicus brief was when the proposed amicus had a direct financial interest in the outcome of the appeal," Rosborough wrote.

He said the brief could have been denied because it raised arguments that weren't addressed in state Supreme Court or if the appellate panel believed the casino's interest in the decision was purely based on economics.

Former state Court of Appeals Justice Bob Smith tweeted that it likely had "nothing to do with the merits of the case or the content of the brief."

Oral arguments in the appeal are scheduled for November.