The battle between New York Attorney General Eric Schneiderman and daily fantasy sports companies, FanDuel and DraftKings, continues. On January 11, the First Department of the Appellate Division of the New York Supreme Court allowed the sites to operate while FanDuel and DraftKings appeal a lower court’s order to shut them down. The First Department granted a stay of the preliminary injunction ordered by the lower court, on condition that the appeals be perfected for the May 2016 Term.
The January 11 stay constitutes a second victory for the sites. Indeed, FanDuel and DraftKings had managed to obtain a temporary stay of the same preliminary injunction on December 11. The earlier stay only allowed the companies to operate until January 4.
Before the appellate court even issued its decision, Schneiderman had already prepared his next move. He spent the holidays amending his complaints against FanDuel and DraftKings to seek restitution of all funds obtained from consumers. The amended complaints against FanDuel and DraftKings were filed on December 31.
The amended pleadings reiterate the Attorney General’s claims that daily fantasy sports amount to gambling in violation of New York law and that the companies use fraudulent and deceptive practices that harm consumers. The pleadings also highlight the fact that New York is just one of many states that have questioned the legality of the daily fantasy sports business.
Schneiderman filed lawsuits against FanDuel and DraftKings on November 17, 2015, after issuing cease-and-desist letters to the companies.