New York Attorney General Eric T. Schneiderman has ordered that daily fantasy sports websites constitute gambling and are illegal, which means DraftKings and FanDuel will cease operating immediately in New York, according to The New York Times.
The attorney general said Tuesday that the multi-billion dollar online websites — which pit players against each other as they “draft” fake teams and score points through statistics — constitute illegal gambling under state law.
Previously, fantasy sports were considered games of "skill" rather than "luck," per a 2006 federal law.
But the New York Times reports that Schneiderman said because of prizes and bets on individual sports, it "[makes] the exemption more difficult to defend.”
—Darren Rovell (@darrenrovell) November 10, 2015
A spokesperson for DraftKings told The Times that, “We’re disappointed he hasn’t taken the time to meet with us or ask any questions about our business model before his opinion.”
FanDuel also released 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.
The companies will be able to challenge the order in court. You can read the full report here.
New York is not the first state to take action against the fan sites. Both fan sites have already been banned in Nevada back in October, which was the first state to take action against the industry which has faced a lot of scrutiny this year.
According to some reports, 70% of players lose money playing daily fantasy sports, and the industry was rocked by a scandal in October when it was revealed that some fantasy website employees were gaining an unfair advantage, a move that some compared to "insider trading."
