Two major U.S. daily fantasy sports companies are pledging to fight back in court against New York's attorney general, who has ordered them to stop accepting bets in the state.
New York Attorney General Eric Schneiderman said the games, on the DraftKings and FanDuel sites, constitute illegal gambling under state law.
"Daily fantasy sports is neither victimless nor harmless, and it is clear that DraftKings and FanDuel are the leaders of a massive, multibillion-dollar scheme intended to evade the law and fleece sports fans across the country," he said.
But DraftKings and FanDuel insist their contests aren't "gambling'' because their customers engage in games that require more skill than chance. “There is a process by which hasty and uninformed opinions can be challenged in a court of law," DraftKings said in a statement issued Wednesday. “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.”
Both services allow users to draft virtual teams of actual professional players and win money based on the players' performance. The attorney general's office said the companies, much like a lottery, mislead consumers into believing they have a shot at winning big, when in reality the odds are vastly stacked against them.
A handful of other states previously have said fantasy sports amounts to gambling. Officials in Nevada ruled last month that fantasy sports betting should be considered gambling, and ordered the sites to suspend operations until they obtain a gambling license from the state. Several other states are considering implementing rules to try to regulate the sites.
But the cease-and-desist order from New York is the first time fantasy sports operators have been formally accused of criminal activity. The attorney general gave the companies five days to respond.
FanDuel is headquartered in New York, while DraftKings is set up in Boston but has a satellite office in Manhattan. Both companies have sponsorship deals with some of the biggest teams in U.S. sports.