N.Y. Takes Action Against Daily Fantasy Sites
Nov 11, 2015 21:31:18 GMT -5
Post by Evelyn on Nov 11, 2015 21:31:18 GMT -5
I wonder if other racing/casino states will follow?
N.Y. Takes Action Against Daily Fantasy Sites
By Frank Angst
BloodHorse
After determining that daily fantasy sports sites FanDuel and DraftKings are violating state law, the New York attorney general sent cease and desist letters to both websites.
The action is the latest move as lawmakers and regulators attempt to get a handle on the booming industry that allows players to select players for short-term contests with cash rewards. New York attorney general Eric Schneiderman said his office has determined that FanDuel and DraftKings, the two industry leaders, are violating state gambling laws, and he requested they stop allowing New York players in their games.
"Our investigation has found that, unlike traditional fantasy sports, daily fantasy sports companies are engaged in illegal gambling under New York law, causing the same kinds of social and economic harms as other forms of illegal gambling, and misleading New York consumers," Schneiderman said. "Daily fantasy sports is neither victimless nor harmless, and it is clear that DraftKings and FanDuel are the leaders of a massive, multi-billion-dollar scheme intended to evade the law and fleece sports fans across the country. Today we have sent a clear message: not in New York, and not on my watch."
In addition, the investigation found that both companies consistently use deceptive advertising to lure consumers into an unregulated online gambling operation that, while marketed as a game that anyone can win, in fact distributes the vast majority of winnings to a small subset of experienced, highly sophisticated players. These winners constitute roughly 1% of all players on the two sites. The attorney general's investigation also revealed that both companies deliberately target demographics susceptible to problem gambling.
DraftKings said that the attorney general did not take proper actions to understand the fantasy sports business and the company will take actions to ensure that it's able to operate in New York.
"We are very disappointed that New York Attorney General Eric Schneiderman took such hasty action today, particularly since he did not take any time to understand our business or why daily fantasy sports are clearly a game of skill," DraftKings said in a statement. "We strongly disagree with the reasoning in his opinion and will examine and vigorously pursue all legal options available to ensure our over half a million customers in New York State can continue to play the fantasy sports games they love.
"We continue to see a number of other officials, including Senator (Joe) Negron in Florida, Representative (Michael) Zalewski in Illinois and the Federal Trade Commission, take a reasoned, informed and measured approach to the daily fantasy sports business. We hope this trend continues along with due consideration for over 56 million sports fans across the country who enjoy playing fantasy sports. We remain committed to working with all relevant authorities to ensure that our industry operates in a manner that is transparent and fair for all consumers.
"New York's actions today are an unfortunate example of a state government stifling innovation, technology and entrepreneurship and acting without full and fair consideration of the interests of consumers."
In a statement, FanDuel suggested that Schneiderman is grandstanding.
"Fantasy sports is a game of skill and legal under New York State law. This is a politician telling hundreds of thousands of New Yorkers they are not allowed to play a game they love and share with friends, family, coworkers, and players across the country," the FanDuel statement said. "The game has been played—legally—in New York for years and years, but after the attorney general realized he could now get himself some press coverage, he decided a game that has been around for a long, long time is suddenly now not legal. We have operated openly and lawfully in New York for several years. The only thing that changed today is the attorney general's mind."
N.Y. Takes Action Against Daily Fantasy Sites
By Frank Angst
BloodHorse
After determining that daily fantasy sports sites FanDuel and DraftKings are violating state law, the New York attorney general sent cease and desist letters to both websites.
The action is the latest move as lawmakers and regulators attempt to get a handle on the booming industry that allows players to select players for short-term contests with cash rewards. New York attorney general Eric Schneiderman said his office has determined that FanDuel and DraftKings, the two industry leaders, are violating state gambling laws, and he requested they stop allowing New York players in their games.
"Our investigation has found that, unlike traditional fantasy sports, daily fantasy sports companies are engaged in illegal gambling under New York law, causing the same kinds of social and economic harms as other forms of illegal gambling, and misleading New York consumers," Schneiderman said. "Daily fantasy sports is neither victimless nor harmless, and it is clear that DraftKings and FanDuel are the leaders of a massive, multi-billion-dollar scheme intended to evade the law and fleece sports fans across the country. Today we have sent a clear message: not in New York, and not on my watch."
In addition, the investigation found that both companies consistently use deceptive advertising to lure consumers into an unregulated online gambling operation that, while marketed as a game that anyone can win, in fact distributes the vast majority of winnings to a small subset of experienced, highly sophisticated players. These winners constitute roughly 1% of all players on the two sites. The attorney general's investigation also revealed that both companies deliberately target demographics susceptible to problem gambling.
DraftKings said that the attorney general did not take proper actions to understand the fantasy sports business and the company will take actions to ensure that it's able to operate in New York.
"We are very disappointed that New York Attorney General Eric Schneiderman took such hasty action today, particularly since he did not take any time to understand our business or why daily fantasy sports are clearly a game of skill," DraftKings said in a statement. "We strongly disagree with the reasoning in his opinion and will examine and vigorously pursue all legal options available to ensure our over half a million customers in New York State can continue to play the fantasy sports games they love.
"We continue to see a number of other officials, including Senator (Joe) Negron in Florida, Representative (Michael) Zalewski in Illinois and the Federal Trade Commission, take a reasoned, informed and measured approach to the daily fantasy sports business. We hope this trend continues along with due consideration for over 56 million sports fans across the country who enjoy playing fantasy sports. We remain committed to working with all relevant authorities to ensure that our industry operates in a manner that is transparent and fair for all consumers.
"New York's actions today are an unfortunate example of a state government stifling innovation, technology and entrepreneurship and acting without full and fair consideration of the interests of consumers."
In a statement, FanDuel suggested that Schneiderman is grandstanding.
"Fantasy sports is a game of skill and legal under New York State law. This is a politician telling hundreds of thousands of New Yorkers they are not allowed to play a game they love and share with friends, family, coworkers, and players across the country," the FanDuel statement said. "The game has been played—legally—in New York for years and years, but after the attorney general realized he could now get himself some press coverage, he decided a game that has been around for a long, long time is suddenly now not legal. We have operated openly and lawfully in New York for several years. The only thing that changed today is the attorney general's mind."
