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Update on NY AG's Suits Against Daily Fantasy Sports Cos.

By Andrew Denney
December 29, 2015

In mid-December, Manhattan Supreme Court Justice Manuel Mendez granted N.Y. Attorney General Eric Schneiderman's motion to halt daily fantasy sports (DFS) sites DraftKings and FanDuel from doing business in the state. Justice Mendez also denied motions by the two companies to block Schneiderman from taking enforcement actions against them. People v. DraftKings, 453054/15; People v. FanDuel, 453056/15.

The companies immediately appealed to the New York Appellate Division. Appellate Justice Paul Feinman granted an emergency stay allowing FanDuel and DraftKings to keep operating in New York at least into January. A full panel of the judges will rule on whether the companies can do business in the state while the appeals process unfolds.

Schneiderman's office launched an investigation into the two companies after a DraftKings employee won $350,000 from FanDuel after beating 200,000 other players. In November 2015, Schneiderman sent the DFS companies cease-and-desist letters, declaring them illegal gambling operations. Schneiderman argued that, while contestants' skill is a factor, the companies offer games that ultimately depend on the performance of professional athletes on the field and other factors that are out of the contestants' control, including injuries to athletes and rain delays.

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