The past few days have seen major developments in the state of New York in regards to daily fantasy sports action. First, the New York Attorney General Eric Schneiderman ruled the activity to be illegal gambling, sending out cease and desist letters to companies offering DFS services in the state, both DraftKings and FanDuel included. Both companies were disappointed in the ruling and ended up filing a temporary restraining order to be able to continue to operate while they fight the battle with the AG. The filing was denied and now it seems FanDuel is making an exit out of the state.
A letter was sent to customers of FanDuel in New York and was also put up on the website of FanDuel. The letter stated that as part of the ongoing effort to fight for New York fantasy users, the company filed a temporary restraining order to allow players to continue to play on the site while the legal case was pending. The court ruled to not issue the TRO and a hearing was scheduled for the 25th of November.
As a result of this, FanDuel decided to suspend entry to paid contests for customers residing in New York as of Tuesday November 17th at 2:30 EST. This move was made in addition to the restrictions that had previously been implemented for deposits of New York residents. Players were not allowed to make any new deposits but it seemed they would be given the opportunity to continue playing with any monies in their account, until the announcement on Tuesday.
FanDuel went on to state that they believe the restriction will be temporary and they hope to be offering paid contests for residents of New York in the near future. Residents have the option to withdraw money at any time, with user funds remaining secure as the court process continues.
FanDuel along with DraftKings both believe that daily fantasy sports is legal within the state of New York, based on a carve-out of the Unlawful Internet Gambling Enforcement Act of 2006. Both are trying to fight the ruling in New York to be able to continue to offer services to residents.
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