The rabbit hole gets deeper, now with some highly publicized brush back from New York Attorney General Eric Schneiderman on Tuesday (Nov. 10). He sent a cease and desist letter to both Fanduel and Draftkings, citing that he demanded they stop accepting "wagers" from New York residents, but did not mention anything about not conducting their business in New York.
This, of course, only adds mud to already murky waters, as the deliberation throughout the country is about whether fantasy sports is really skill or games of chance. In a letter obtained by ESPN's David Purdum and Darren Rovell and ABC News, Schneiderman states: "Our review concludes that DraftKings'/FanDuel's operations constitute illegal gambling under New York law, each DraftKings/FanDuel wager represents a wager on a 'contest of chance' where winning or losing depends on numerous elements of chance to a 'material degree.' (People) are clearly placing bets on events outside their control of influence, specifically on the real game performance of professional athletes."
Fanduel responded: "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 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."
Draftkings' two cents: "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. 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 [Mike] 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. 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. 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."
In a side note, the Nevada Gaming Control Board ruled in October that both sites classified as sports gambling and would require a license to operate in Nevada, to which both promptly stopped conducting business there. This is simply one of many updates to follow as new stuff comes forward in the ongoing saga.