This past Tuesday, the New York Attorney General issued cease and desist letters to both FanDuel and DraftKings in an effort to stop the popular daily fantasy sports websites within the state. The AG referred to the sites as “no different than Las Vegas bookies.”
Last Monday, Fan Duel and Draft Kings filed temporary restraining orders to put a halt to New York’s Attorney General’s attack on the companies. New York Supreme Court Justice Manuel Mendez denied the sites’ temporary restraining orders, and instead scheduled an emergency hearing to determine the legality of daily fantasy sports on November 25, 2015.
The key issue is whether these daily fantasy sports websites are games of skill or simply gambling in disguise. New York state law prohibits sports gambling, defining gambling as wagering money on a “future contingent event not under the bettors control or influence” or on a “contest of chance.”
When it comes to fantasy sports, is it undisputed that there is a decent amount of luck involved. Will my player be healthy? What if my player gets suspended? What if my player plays poorly? However, one may argue that fantasy sports requires some skill: picking good players, deciding appropriate matchups versus other teams, and choosing who to bench. Ultimately, a fan cannot actually control how well one of their players on their fantasy football team plays, despite household rituals practiced by virtually every superfan.
If past events are any indication, trouble appears to be on the horizon for FanDuel and DraftKings. Last month, both companies withdrew from Nevada after regulators decreed it to be a form of gambling, one that requires a license. Ultimately, the companies’ respective futures will depend on gambling laws on a state-by-state basis, short of an overarching federal ruling.
What do you think? Are daily fantasy sports sites like Draft Kings and Fan Duel a form of gambling or a game of skill? One thing’s for certain – millions of participants better act fast before the sites are benched for good.