Edinburgh-based fantasy sports operator FanDuel looks set to legally challenge a “cease-and-desist letter” from New York attorney general Eric Schneiderman that has ordered it to stop accepting bets in New York State.
Schneiderman claimed that an investigation by his office found FanDuel — co-founded by Nigel and Lesley Eccles (pictured) — and another operator DraftKings to be in violation of New York State law against illegal gambling.
“Our investigation has found that, unlike traditional fantasy sports, daily fantasy sports companies are engaged in illegal gambling under New York law, causing the same kinds of social and economic harms as other forms of illegal gambling, and misleading New York consumers,” said Schneiderman.
“Daily fantasy sports is neither victimless nor harmless, and it is clear that DraftKings and FanDuel are the leaders of a massive, multi-billion-dollar scheme intended to evade the law and fleece sports fans across the country. Today we have sent a clear message: not in New York, and not on my watch.”
Schneiderman claimed the investigation found that both companies consistently use deceptive advertising to lure consumers into an “unregulated online gambling operation that, while marketed as a game that anyone can win, in fact distributes the vast majority of winnings to a small subset of experienced, highly sophisticated players.”
The attorney general claimed these winners constitute roughly 1% of all players on the two sites. Schneiderman claimed the investigation also revealed that both companies deliberately target demographics susceptible to problem gambling.
FanDuel has announced a legal challenge to the New York ban and said in a statement: “Fantasy sports is a game of skill and legal under New York State law. This is a politician telling hundreds of thousands of New Yorkers they are not allowed to play a game they love and share with friends, family, coworkers and players across the country.
“The game has been played — legally — in New York for years and years, but after the attorney general realized he could now get himself some press coverage, he decided a game that has been around for a long, long time is suddenly now not legal.
“We have operated openly and lawfully in New York for several years. The only thing that changed today is the Attorney General’s mind.”