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DraftKings, FanDuel Reach Agreement With New York

Two DFS Sites To Stop Doing Business With People In State


DraftKings and FanDuel, two of the leading gaming sites in the daily fantasy sports space, have agreed to stop doing business with people physically located within New York.

The sites were told by the Empire State’s attorney general in November that DFS violates state gambling laws. DraftKings and FanDuel challenged the state in the following months before announcing Monday that they would stop operations as New York works on a DFS bill that would allow them to re-enter the market and be in full compliance with the law.

“I’m pleased to announced that both FanDuel and DraftKings will stop taking bets in New York State, consistent with New York State law and the cease-and-desist orders my office issued at the outset of this matter," New York attorney general Eric Schneiderman said in a statement. “As I’ve said from the start, my job is to enforce the law, and starting today, DraftKings and FanDuel will abide by it. Today’s agreement also creates an expedited path to resolve this litigation should that law change or upon a decision by the appellate division.”

He added: "Regardless, our key claims against the companies for false advertising and consumer fraud are not affected by the agreement and will continue.”

The Empire State, which has 19.75 million residents, represents nearly 13 percent of the active users for the two companies, according to company filings.

Legislation is currently on the table that would lead to regulation of DFS in New York. That bill is in addition to another bill that would bring online gaming to New York in the form of peer-to-peer poker play. The state’s online poker bill cleared the Senate’s Racing, Gaming and Wagering Committee early last month. Sen. John Bonacic is the sponsor of both bills.

While the agreement with DraftKings and FanDuel could fast-track DFS legalization in New York, online poker might take longer because it was said at a previous hearing that the legislature probably wouldn’t move on Internet poker until the state’s new brick-and-mortar casinos are built.

In a statement, DraftKings said that it is “grateful to the hundreds of thousands of New Yorkers who have enjoyed playing fantasy sports on DraftKings for the last four years” and that it “will continue to work with state lawmakers to enact fantasy sports legislation so that New Yorkers can play the fantasy games they love.”

FanDuel issued a similar statement, saying: "New York is a critical state for FanDuel. FanDuel is headquartered in Manhattan, where we employ more than 170 young smart, passionate fans who are committed to innovating and providing the best fantasy experience possible. We are proud to be one of New York’s largest startup companies, and while it is disheartening for us to restrict access to paid contests in our home state, we believe this is in the best interest of our company, the fantasy industry and our players while we continue to pursue legal clarity in New York.”

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