Monday, March 21, 2016

CNBC: DraftKings, FanDuel to stop paid contests in NY

DraftKings, FanDuel to stop paid contests in NY
artwork by Elizabeth Williams

DraftKings and FanDuel will stop running paid contests 
in New York amid an ongoing fight to operate in the key market.

Under the New York agreement, DraftKings and FanDuel will stop paid contests and delay an appeal until September. However, if state lawmakers pass legislation explicitly allowing and regulating paid daily fantasy sports, the state's gambling claims will end. 
Prior to this agreement Draftkings and Fanduel had sought a halt of NY AG action pending appeal on March 9th.
In an afternoon proceeding before Judge Manuel J. Mendez in Manhattan, attorneys for DraftKings and FanDuel said a complete pause of the action is warranted while the First Department considers the appeal, since the appeals court will be addressing core legal and factual issues that will impact the entire case, such as the reach of New York’s gambling statutes.
“We believe it makes sense,” DraftKings attorney Randy Mastro of Gibson Dunn told Judge Mendez. “We believe it would be prudent for this court and all the parties to have that guidance under the law.”

Schneiderman filed suit against the daily fantasy sports companies in November, alleging the contests were games of chance and thus illegal sports gambling under New York law. The suit was expanded in January to include false advertising claims.
A lawyer for the AG’s office, Justin Wagner, told Judge Mendez that it is high time that DraftKings and FanDuel answer the amended complaint’s allegations of illegal gambling and false advertising, and called for limited discovery to commence.

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