Court Allows DFS Operators to Continue Operations in New York Amid Appeal
The Daily Fantasy Sports sites, DraftKings and FanDuel, have been informed that they can continue to operate in New York while they appeal a judge's order to stop playing in the state. This was decided by a panel of appellate court judges.
The decision by state's Supreme Court Appellate Division in Manhattan was granted a month after one of the judges who was on the panel stayed a lower court's ruling that the companies had to stop business in New York.
The preliminary injunction granted came after the state Attorney General, Eric Schneiderman, sued the DFS companies to end operations, he argued that they were operating as illegal gambling operations. The case is set to before the court during its May session.
David Boies, a lawyer for the Boston-based DraftKings, said that as their litigation continues, they expect the appellate court to see what they have known since the outset, that DFS is a game of knowledge and skill and one that builds the community, whose competitive spirit is important to the lives of millions of people.
This ruling is the most recent in the legal saga that began in November, when A.G. Schneiderman's office first issued cease-and-desist letters to the companies.
Since then, A.G. Schneiderman has argued that the games are illegal because they are dependent on factors that are out of players' control, for instance, as the weather or even blown calls.
Damien LaVera, A. G. Schneiderman's spokesman said that as they have already got a preliminary injunction against the companies, they look forward to demonstrating to the appellate division that the trial judge was in fact correct, and that DraftKings and FanDuel were operating illegal gambling operations in New York, and therefore should be permanently barred from doing any business in New York.
Both DraftKings and the New York-based FanDuel have argued that their businesses would be greatly harmed should they not be allowed to continue their New York business during the appeal process. This is taking place during the NFL playoffs.
The two highly popular companies together took in combined about $3 billion last year when they partnered with sports companies, such as, ESPN and Major League Baseball. But their very aggressive ad campaign which operated ahead of the 2015 NFL season came to the attention of regulators and lawmakers who questioned their business models in Illinois and Nevada.