DraftKings, FanDuel to fight order shutting down sites in New York

DraftKings and FanDuel are pledging to fight back in court against New York’s attorney general, who has ordered the daily fantasy sports sites to stop accepting bets in the state on the grounds that they violate gambling laws.

“There is a process by which hasty and uninformed opinions can be challenged in a court of law, which would allow DraftKings to not have to cease operations in the state of New York,” a representative said in a statement issued Wednesday.

“We will pursue this fight to the fullest to ensure that New York fantasy sports fans do not need to stop playing the games they love.”

{mosads}New York Attorney General Eric Schneiderman sent letters to DraftKings and rival service FanDuel on Tuesday informing them that they were in violation of state gambling law and ordering them to stop accepting bets. The companies can challenge the cease-and-desist messages in court.

FanDuel’s CEO and outside lawyer said on a call Wednesday that they were considering a range of legal options for challenging the cease-and-desist letter but indicated they intended to continue to operate in New York for the time being.

Both services allow users to draft virtual teams of actual professional players and win money based on their performance. Unlike traditional fantasy sports — which last a full season — new games are available on the website on a daily basis.

While the companies say they offer games of skill exempt under a federal law that targets financial transactions behind online betting, critics, including Schneiderman, contend the websites actually facilitate gambling.

“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,” Schneiderman said in a statement on Tuesday. “Today we have sent a clear message: not in New York, and not on my watch.”

A representative for FanDuel did not immediately respond to a request for comment on Wednesday about whether they had, like DraftKings, updated their position on whether to fight the order.

On Tuesday, the company told The New York Times that the orders represented a “politician telling hundreds of thousands of New Yorkers they are not allowed to play a game they love and share with friends, family, co-workers and players across the country.”

The battle in New York comes amid national scrutiny of the industry. Not only have critics raised concerns that the websites constitute gambling, but the revelation that a DraftKings employee with access to player data won $350,000 on FanDuel has set off concerns about the safety of data on the platforms.

Nevada’s gaming control board has also declared the games gambling. Unlike in New York, the services pulled out of the state when the ruling came down.

— This story was updated at 2:53 p.m.