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New York Asks Fantasy Sports Sites to Give Money Back in Amended Lawsuit

FILE - An employee at DraftKings, a fantasy sports company, is seen working on his laptop at the company's offices in Boston, Massachusetts, Sept. 9, 2015.

New York Attorney General Eric Schneiderman on Thursday filed an amended lawsuit against DraftKings and FanDuel, asking the daily fantasy sports companies to give back all the money they made in New York state.

The amended lawsuit asks the two companies to make restitution of all funds obtained from consumers in connection with alleged violations and seeks a civil penalty of up to $5,000 per case.

The lawsuit also asks that the two companies provide an accounting of the money they collected from consumers in New York who played any of their games.

"Like the NYAG original complaint, it is based on the fundamental misunderstanding of fantasy sports competitions," David Boies, a lawyer for DraftKings, said in a statement about the revised complaint.

DraftKings declined to comment specifically on the demand for restitution. New York-based FanDuel did not immediately respond to a request for comment.

The amended lawsuit is the latest twist in the fantasy sports companies' legal battle in New York to permanently continue doing business there.

How it works

FanDuel and DraftKings are engaged in a fight in court against New York state's top prosecutor, who says that the two companies are running illegal gambling operations and ordered them to stop taking bets in the state.

The daily fantasy sports companies, which contend that the games require skill, in December won a temporary reprieve that allows them to keep operating in New York until at least January 4.

The fantasy sports industry allows participants to assemble imaginary pro football, baseball, basketball and hockey teams from rosters of real players and to accumulate points based on how those players perform in actual games over the course of a season.

The daily versions allow fans to spend money on the game with a frequency that critics say is akin to sports betting. Purveyors of fantasy sports argue it is a skill-based entertainment product, not wagering.

Boston-based DraftKings and FanDuel, both privately held, have valuations of more than $1 billion. High-profile investors have poured money into both.

FanDuel has more than 600,000 players in the state, about 10 percent of its users, and DraftKings has more than 500,000 daily fantasy players in the state. New York has the most daily fantasy sports players of any state, according to Eilers Research.