Despite objections by New York Attorney General Eric Schneiderman, daily fantasy sports (sometimes referred to as “DFS”) fans in New York were able to play using the sites FanDuel and DraftKings over the holidays. This “gift” came in the form of a one-line handwritten order from the First Department of the New York Supreme Court Appellate Division. The order, dated December 11, was an emergency stay and allowed the sites to operate until January 4, 2016.
The Appellate Division order was issued just six hours after the lower court granted the Attorney General’s motions for preliminary injunctions to temporarily block the sites, in an opinion drafted by Justice Manuel J. Mendez of the New York Supreme Court for New York County.
The quick turn of events is typical of the recent battles between state attorneys general and the daily fantasy sports sites. Each party stands ready to react to any move made by its opponent(s). In New York, the hostilities began on November 10 when the Attorney General issued cease-and-desist letters to the sites, arguing that playing daily fantasy sports constitutes gambling in violation of New York law. Three days later, each site filed a complaint against the Attorney General. On November 17, the Attorney General filed separate lawsuits against the sites.
In addition to New York, several other attorneys general have challenged the legality of daily fantasy sports. On December 23, Illinois Attorney General Lisa Madigan stated in a letter to members of the state’s criminal judiciary committee that the daily fantasy sports contests offered by FanDuel and DraftKings constitute illegal gambling under Illinois law. On December 24, DraftKings and FanDuel filed separate lawsuits against Madigan, seeking declarations that their sites are legal.
The survival of daily fantasy sports will surely be at stake in 2016. We can expect, however, that the sites will not go down without a fight.