New York Court Permits Fantasy Sports Betting Amid Appeal
NEW YORK (CBSNewYork) -- A New York court will allow DraftKings and FanDuel to continue operating in the state as they appeal a lower court's ruling that they stop.
A panel of state Supreme Court Appellate Division judges in Manhattan continued a stay Monday issued by one if its members exactly a month ago.
The case will next be argued in May.
State Attorney General Eric Schneiderman had sued the country's two biggest daily fantasy sports sites to stop them from operating. He has argued the games are illegal gambling operations.
"Daily fantasy sports is neither victimless nor harmless, and it is clear that DraftKings and FanDuel are the leaders of a massive, multi-billion-dollar scheme intended to evade the law and fleece sports fans across the country," Schneiderman said in a November statement.
A lower court judge agreed and ordered them to stop.
But the companies appealed, arguing their contests are games of skill, not chance. They had argued their businesses would suffer greatly if they were forced to stop customers from playing.
Fantasy sports "have been offered openly, honestly, and permissibly in New York for nearly a decade; and if the NYAG had actual evidence that they caused public harm, he would have identified it in his brief," wrote DraftKings attorney Randy Mastro wrote in a filing. "There is none."
Fantasy sports allow fans to select a virtual team of real-life players and accumulate points based on their performances. The popularity of the games has exploded over the past 15 years.
While many season-long leagues are comprised of friends or co-workers who play for free or pay fees of varying amounts into a jackpot to be paid to winners, the online daily fantasy sports sites have popped up in recent years. Those sites allow paying participants to select a new team, or multiple teams, every day, and large cash prizes are awarded to the top performers.
Buy-in fees on the daily sites can range anywhere from 25 cents to $5,000.
Schneiderman has drawn a sharp distinction between the operations of daily fantasy sports sites and traditional fantasy leagues, which he said were legal partly because they relied on months of smart play over the course of several months. DraftKings and FanDuel contests, he wrote, are about "instant gratification" and involve no long-term strategy.
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