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DraftKings and FanDuel Ordered to Close in New York

DraftKings and FanDuel Ordered to Close in New York

Around a month ago the gambling regulators in Nevada ordered the closure of the fantasy sports websites DraftKings and FanDuel. Now the state of New York has declared that the websites constitute illegal gambling and told them to shut down.

Each of the sites is worth over $1 billion and they give fans the chance to enter daily fantasy sports competitions and compete for prizes of up to $2 million. However, in the majority of US’ states sports gambling is illegal and it is this that led New York’s attorney general to rule that both companies must close their operations.

The attorney general also said that daily fantasy sports are causing the “same kinds of social and economic harms as other forms of illegal gambling”.

The two websites insist that they offer skill based games rather than chance based wagers which could be considered illegal according to the 2006 Unlawful Internet Gambling Enforcement Act.
FanDuel said in a statement that “fantasy sports is a game of skill and legal under New York state law”. Furthermore, the company recently opened 40,000 square-foot headquarters in New York so the ruling will come as an extremely harsh blow.

DraftKings issued a similar statement and said that the attorney general did not take the time to understand the business or why “daily fantasy sports are clearly a game of skill”.
The two websites have been given five days to respond to the ruling. If it is upheld it may prove to be devastating for the businesses and according to industry research New York has more daily fantasy users than any other state.

OCA News Editor




November 2015

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