New York Gaming Commission In No Mood To Regulate DFS After Court Calls It Illegal
In November 2015, New York’s State attorney general told daily fantasy sports companies FanDuel and DraftKings to stop conducting business with New York citizens. Three years later, FanDuel, DraftKings and other daily fantasy sports companies are freely operating in the state. A recent court ruling could make the situation even more pleasant for those companies, at least in the near term.
FanDuel and DraftKings are reportedly no longer being regulated in the State of New York. The state Gaming Commission has ceased regulating daily fantasy sports entities even though the second half of the National Football League season can account for some of the most active fantasy sports activity during the calendar year.
The Gaming Commission’s decision comes in the wake of a New York state judge holding that daily fantasy sports competitions are a form of gambling and should be deemed illegal activity. The lower court ruling did not scare any major daily fantasy sports companies such as FanDuel and DraftKings into ceasing their operations in the state. As such, the Gaming Commission decided it did not want to be in the middle of a court ruling and continued activity by operators that could technically be deemed illegal.
One big reason why many daily fantasy sports operators continue to conduct business in New York is that the court also held that criminal penalties will not apply to those who provide services to consumers in the meantime. With only potential civil relief on the line, continued activity is a risk that all the big daily fantasy sports businesses are willing to take.
“We understand that the State will be taking an appeal from the court’s decision, and DraftKings plans to continue to operate in New York while the courts and the State continue to sort this out,” says a statement from DraftKings. “Any impact from the decision (if it ultimately stands) will be stayed while any appeals are pending.”
DraftKings, FanDuel and other daily fantasy sports companies certainly find themselves in a weird position in the Empire State while an appeals process probably plays itself out. Meanwhile, those same entities are pushing legislators for a change in the state’s sports betting laws, which would allow them to greatly expand their operations and compete against a robust New Jersey sports wagering market that is growing by the month.