Daily fantasy sports sites Draft Kings and FanDuel have agreed to stop taking bets in New York after battling the state for months over its legality.
The AP reports the two companies have agreed to stop taking bets until the end of the baseball season. The deal was reached between the two companies and New York Attorney General Eric Schneiderman, who previously sued the companies for illegal betting.
Reuters reports the agreement means DraftKings and FanDuel will stop operating in the state, and an appeal of an injunction against the companies will be heard by the courts in September. The same report said if DFS is eventually legalized in New York, the gambling claims will be dropped. You can find the full details of the settlement here and here.
Schneiderman issued the following statement to Legal Sports Report saying today’s agreement will fast track resolution in the case.
“I’m pleased to announced that both FanDuel and DraftKings will stop taking bets in New York State, consistent with New York State law and the cease-and-desist orders my office issued at the outset of this matter. As I’ve said from the start, my job is to enforce the law, and starting today, DraftKings and FanDuel will abide by it. Today’s agreement also creates an expedited path to resolve this litigation should that law change or upon a decision by the appellate division. Regardless, our key claims against the companies for false advertising and consumer fraud are not affected by the agreement and will continue.”
FanDuel also issued a statement to Legal Sports Report, saying the news was disheartening but the move was made in the best interest of the company.
“We are announcing that as of today, FanDuel will cease offering paid contests in the state of New York per the terms of a settlement reached with the Attorney General on certain aspects of the ongoing litigation.
New York is a critical state for FanDuel. FanDuel is headquartered in Manhattan, where we employ more than 170 young smart, passionate fans who are committed to innovating and providing the best fantasy experience possible. We are proud to be one of New York’s largest startup companies, and while it is disheartening for us to restrict access to paid contests in our home state, we believe this is in the best interest of our company, the fantasy industry and our players while we continue to pursue legal clarity in New York.”
DraftKings told Legal Sports Report they’ll continue to work with New York to get daily fantasy sports legalized in the state.
“Effective today, as part of a settlement reached with the Attorney General’s office, DraftKings will stop offering paid daily fantasy sports contests in New York State.
We are an industry leader in technology, innovation and consumer protections, and we are grateful to the hundreds of thousands of New Yorkers who have enjoyed playing fantasy sports on DraftKings for the last 4 years. We will continue to work with state lawmakers to enact fantasy sports legislation so that New Yorkers can play the fantasy games they love.”
The news comes two weeks after a victory for DFS in Virginia, which legalized daily fantasy sports.
Today’s news is certainly disheartening for DFS sites, but not necessarily the beginning of the end. By agreeing to reach a deal with the state, they’ll clear up a murky situation faster, getting a quicker resolution instead of delaying the proceedings by fighting other claims. Yes, they won’t be allowed to operate, but resolution for the companies future in New York is on its way.