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DraftKings, FanDuel Will Fight Cease-And-Desists

Fantasy sports sites DraftKings and FanDuel are still operating in New York and plan to fight cease-and-desist orders from State Attorney General Eric Schneiderman. Schneiderman ordered both companies to stop collecting bets, but Channel 2 reports that, as of November 11, they were still allowing New Yorkers to enter fantasy contests for football, hockey, and basketball. The State Attorney General’s office argues that these are games of luck, not skill, and that they therefore violate New York State gambling laws.

WGRZ reached out to nationally renowned criminal defense attorney Paul Cambria for his legal analysis of the issue. The full story is available at WGRZ’s website.

Options other than compliance

FanDuel and DraftKings do not have to immediately cease and desist, Mr. Cambria said, but they continue operations “at their own peril.” He went on to say that, in order to continue collecting entries in New York, the companies will most likely “either file a declaratory judgment and ask that the law be declared not applicable, if you will, to fantasy sports, or they will wait to get arrested and then they’ll raise that challenge as part of their defense.”

Fantasy sports: luck or skill?

According to WGRZ, one of the disputes in this case is over whether the games played on FanDuel and DraftKings are games of luck or games of skill. If the games are based on chance, as the state claims, then the companies are in violation of New York State gambling laws. WGRZ reports that the state constitution outlaws gambling, with the exception of “the state lottery system, charitable bingo, wagering on horse racing, and up to seven private casinos.”

When asked for comment about whether fantasy games are luck or skill, Mr. Cambria said, “There is some skill in the contestants […], the people who are in the game, because they’re picking the players. They’re picking the player combinations.” Mr. Cambria called the exemptions “kind of hypocritical, because the State of New York is in the gambling business.” He also told WGRZ that “the federal government has recognized fantasy sports as a non-gambling skill event.”

Fantasy sports sites must have exemption, AG says

State Attorney General Schneiderman said in an interview that any type of gambling in New York State must have an exemption, similar to those obtained by casinos and horse racing. “This is not me drawing the line,” he said. “This is holding the law steady so it isn’t unfair.”

WGRZ asked Mr. Cambria for his opinion on the eventual outcome of the case. He responded, “I think it’s going to be along the lines of the federal, which is that they’re games of skill.”

About Paul Cambria

The chair of Lipsitz Green Scime Cambria’s Criminal Defense Trials and Appeals Practice Area, Mr. Cambria advises clients on criminal trials, criminal appeals, constitutional and First Amendment law, zoning and land use, antitrust, and professional licensing defense. He divides his time between the firm's offices in Buffalo and Los Angeles.

 

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