New York’s Restrictive Court Ruling Take On DFS Contests

Cvetanka Cvetanovska | Published 7 Feb 2020, 1:42 p.m.

Recently we reported on the expansion of FanDuel and the opening of new betting venues in Colorado and Pennsylvania. As they stated, their plan is to provide more options than any other competitor in the daily fantasy sports segment.

However, daily fantasy sports providers are facing uncertain future and major difficulties in New York. The court agreed on a 2018 rule that these games are illegal under the New York constitution. The decision that was made last Thursday presented an appeal of a prior ruling subject when a 2016 law legalising these games violated a constitutional ban on gambling.

Daily Fantasy Games – a game of skill or a game of chance

As established under the New York constitution, voters must approve new forms of gambling after a referendum is held. In the meantime, Since New York’s DFS laws passed without any referenda, they are, as interpreted, now illegal in the state.

This ruling is now expected to head to the state’s Court of Appeals. It is uncertain if the players will be able to continue participating in the contest while the appeal is still pending. Until now, they have been able to participate in the DFS contests. If the appeal is successful, Daily Fantasy Sports operators will be allowed to operate. At the same time, the law mandates the state’s highest court hear lawsuits against the state government. This is happening because the Legislature unlawfully authorised the activity by categorising it as a game of skill, not chance. 

However, it could take days before the request is submitted, and DFS providers may not be willing to put up with bigger consequences by taking their players on thin ice. Some experts say that FanDuel and DraftKings might just press the pause button for New York for an unlimited period of time. 

The law was brought in question by a lawsuit initiated by the group Stop Predatory Gaming. They acted on behalf of several prosecutors who have suffered personal harm from gambling debts.

What Experts Say

The National Director of Stop Predatory Gambling expressed his opinion on the matter. He said the reason behind the NY constitutional ban on commercialised gambling is because there’s an impression that the state government contributes to the debt culture. This is happening because the States have had different approaches to this game back in 2014 and 2015 when the presence of daily fantasy sports was everywhere. Some officials declared the games as a game of skill, others as a game of chance, allowing players to enjoy the games though they weren’t covered by the law.

A spokesman for the Attorney General said that the DFS legislative action was constitutional and in the best interest for fantasy sports fans and taxpayers.

Rob Rosborough, an expert on state courts tweeted that based on the constitutional question, the State would appeal as of right to the NY Court of Appeals. This means providers might get an automatic stay of the order. For now, DFS can continue operating in New York.

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