ALBANY, N.Y. (CBSNewYork/AP) — Daily fantasy sports operator DraftKings has asked a New York judge for a temporary restraining order to block the state attorney general’s attempt to shut it down.
In separate complaints filed in state Supreme Court in Manhattan on Friday, FanDuel and DraftKings similarly asked a judge for an injunction, arguing that Attorney General Eric Schneiderman wrongly characterized their businesses as illegal gambling operations.
Now, Boston-based DraftKings has asked Justice Manuel Mendez in Manhattan for a restraining order to preserve the status quo, arguing it will suffer “massive and irreparable harm” if forced to shutter operations in New York, where it has 375,000 of about 2.5 million total players.
Schneiderman’s office is expected to file court papers later Monday.
DraftKings and FanDuel argue that they offer games of skill, not of chance, as defined New York’s gambling laws.
Schneiderman also said advertisements by the two companies, including one from DraftKings promoting the site as “the simplest way of winning life-changing piles of cash,” misled players about their chances of winning. The top 1 percent of players, he wrote, take home most of the prizes.
“The overwhelming majority of the bettors are lured in with these ads making it look like an easy way to make money,” he said. “The overwhelming majority just lose money.”
New York is not alone in trying to stop the sites. Nevada last month declared the games gambling, which requires their operators to have state licenses. New Jersey, Pennsylvania, Massachusetts and Georgia are contemplating action as well, CBS2’s Diane Macedo reported.
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.
Schneiderman drew 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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