In response to cease-and-desist letters sent last week by the attorney general for the US state of New York to daily fantasy sports operators DraftKings and FanDuel, the two companies applied for temporary restraining orders against the state and also filed lawsuits in a state court seeking a ruling that the games do not constitute illegal gambling.

FanDuel DraftKings

The two applied for the temporary restraining orders to enable them to keep operating while waiting for the lawsuit hearings, which have been scheduled for November 25. However, a New York state judge denied the application for restraining orders on Monday, November 16.

In filing for the lawsuits, DraftKings said that attorney general Eric Schneiderman was "using strong-arm tactics and defying the rule of law."

Last week’s letters to DraftKings and FanDuel were issued following a month-long review of DFS activity in New York state.

The letters said that DFS customers 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’.”

With the temporary restraining orders not forthcoming, the two operators must now wait for New York Supreme Court judge Manuel Mendez to hear the arguments on November 25.

Source: Reuters