The office of the attorney general for the US state of New York has issued cease-and-desist letters to FanDuel and DraftKings, the leading daily fantasy sports operators in the state.
In near-identical four-page letters sent to the CEOs of each operator, the state demanded that FanDuel and DraftKings “cease and desist from illegally accepting wagers in New York state in connection with daily fantasy sports.”
The move follows a month-long review of DFS activity in the state. The letter continues: “Our review concludes that [these] operations constitute illegal gambling under New York law, according to which ‘a person engages in gambling when he stakes or risks something of value upon the outcome of a contest of chance or a future contingent event not under his control or influence’.
“Customers [of FanDuel/DraftKings] are clearly placing bets on events outside of their control or influence, specifically on the real-game performance of professional athletes.
“Further, each wager represents a wager on a ‘contest of chance’ where winning or losing depends on numerous elements of chance to a ‘material degree’.”
The letter adds that DFS contests are “neither harmless nor victimless”, creating the “same public health and economic concerns as other forms of gambling, including addiction.” The letter also said that DFS advertisements in the state “seriously mislead New York citizens about their prospects of winning.”
The letter also serves as a “formal pre-litigation notice” suggesting that, even if the operators respond positively to the demand to cease activities in the state, the attorney general is not yet finished with DFS.
FanDuel and DraftKings have until Tuesday, November 17, to respond.
