After filing complaints against FanDuel and DraftKings, ruling daily fantasy sports illegal within the state of New York, the Attorney General for the state has now amended his complaints to further damage the industry’s chances of operating. Attorney General Eric Schneiderman has amended his complaint against the DFS sites, now seeking a return of all funds that were wagered by residents of New York who took part in DFS contests with both sites.
Not only is Schneiderman seeking a return of all funds but he has also requested that punitive damages be paid in amounts going as high as $5,000 per player. In the past, DraftKings stated that they had close to 375,000 members from the state and ESPN has reported that both sites combined have around 600,000. This means that the punitive damages would result in close to $3 billion, a massive amount of cash which could put both companies out of business across the board.
FanDuel has commented on the amended complaints by the AG, stated that FanDuel remains committed to offering the fantasy contests for fans of New York sports, for season-long or daily contests. FanDuel stated they are thoroughly disappointed in the ongoing actions by the New York Attorney General and will fight the ‘meritless, amended suit until fantasy sports are safeguarded for all sports fans’.
DraftKings also spoke out against the complaint amendments with information provided by David Boies, the lead counsel for the company. Boies stated that the arguments remain strong and the company is confident in their appeal for four reasons. First, DraftKings says that the Attorney General has provided no evidence that will support a preliminary injunction. Second, daily fantasy sports contests are not considered gambling as the outcome is controlled by the knowledge and skill of DFS players is how one wins or loses.
Boies also pointed out that the only difference between a season-long fantasy contest and daily option is how long it lasts and the AG has stated that the season-long contests are legal. The counsel also pointed out that it is legal for skill based contests to charge an entry fee and award prizes for contestants who participate. The player of DFS has control and influence over if they win a prize or not with their choice of roster which is an exercise of skill.
Both DFS companies have been able to continue operations thanks to Judge Paul Feinman who granted a stay after the AG was granted an injunction by New York Supreme Court Judge Manuel J. Mendez to prevent the gaming sites from operating within the state. DraftKings has decided to continue operations while FanDuel has temporarily stopped services in the state.
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