Fantasy sports companies and their users just lost big in New York. New York’s Superior Court upheld a ban on DraftKings and FanDuel operating in New York State, dealing a significant blow to the entire industry since it will likely prompt similar actions in other states.
In his ruling, Judge Manuel J. Mendez noted the New York attorney general’s “interest in protecting the public, particularly those with gambling addictions.” Mendez largely sympathized with a prior cease and desist order against DraftKings and FanDuel issued by the attorney general; DraftKings and FanDuel were both hoping the judge would overturn the order. Both companies vehemently reject any suggestion that they run gambling services, arguing instead that daily fantasy sports are a game of skill.
David Boies, DraftKings counsel, emailed us a statement reading “We are disappointed with the Court’s decision, and will immediately file an emergency notice of appeal in order to preserve the status quo. Daily Fantasy Sports contests have been played legally by New Yorkers for the past seven years and we believe this status quo should be maintained while the litigation plays out.”
A FanDuel spokesperson added “We will be appealing–this is only the beginning of the legal process and, perhaps more importantly, the New York legislature is already moving forward on action to ensure our game remains legal and is regulated, which we strongly support. The court specifically noted that this was not a final determination of the issue and that discovery would be needed to fully resolve the legal question, which we think should be decided in our favor when all of the evidence is in.”
The Washington Post’s Renae Merle characterizes the ban as a “severe blow.”
Update: A court ruling issued a few hours later has given DraftKings and FanDuel the ability to operate in New York State again. Both companies are preparing to argue for continued New York operations in court next year.