New York appellate court rules daily fantasy contests are illegal

This week in New York, an appellate court ruled that a law from 2016 legalizing daily fantasy sports contests was in violation of the constitution’s prohibition on gambling. The future for major DFS companies like DraftKings and FanDuel is now uncertain in the Empire State.

Lower Court Ruling Upheld:

The appellate court upheld a ruling from a lower court that lawmakers unlawfully allowed daily fantasy sports to take place by classifying it as a game of skill and not one of chance. The group that brought the lawsuit to the state is represented by attorney Neil Murray. Mr. Murray stated that the group is grateful for the decision and they feel that the integrity of the state’s constitution has been upheld.

The lawsuit was helped along by the Stop Predatory Gambling group on the behalf of four individuals who have suffered due to gambling debts.

The bill regarding daily fantasy sports was signed by Governor Andrew Cuomo back in 2016 and allowed top DFS companies to legally offer services in New York. Earlier in the year, DraftKings and FanDuel had agreed to stop offering DFS operations in the state after a settlement was reached with the Attorney General at the time, Eric Schneiderman. The AG had stated that the DFS industry was illegal at the time.

According to MarketWatch…

Attorney General Letitia James staff is reportedly reviewing the decision and have not decided as of yet if they will be appealing within the Court of Appeals. DraftKings has responded to the decision, stating that they believe the legislative action taking years ago to authorize fantasy sports in the state was constitutional and that it is in the best interest of both tax payers and fans of fantasy sports.

DFS Contest Issues: 

The decision in New York comes at a time when DraftKings just recently had an issue with one of their DFS contests. In late January, it decided to strip the winner of their Millionaire Maker daily fantasy sports contest of the $1 million prize due to exploiting a loophole within the rules of the contest. The DFS brand took to Twitter to state that the standings for several contests had been updated. The second place finisher spclk36 was now the winner of the Millionaire Maker and the former winner, bachelor contestant Jade Roper Tolbert was no longer named on the list.

Jade and her husband Tanner reportedly pooled their entries to give them the best shot of winning the contest. Basically, the two were able to work around the 150 entry limit and increase their chances of winning by having rosters that had very few, if not any, players in common.