Daily fantasy sports
(DFS) operators DraftKings and FanDuel have reached a compromise with New York
Attorney General Eric Schneiderman, which will see the companies withdraw
their paid-contests from the state with immediate effect.
agreement will see each company withdraw their core product from New
York until there is a change in the state’s gambling law, or
until they can successfully argue the legality of DFS at an appellate
hearing due to take place in September.
will also drop their legal action against Schneiderman, while the AG will
drop all illegal gambling claims against the two in return.
will still be able to pursue cases involving allegations of false
advertising, which could ultimately see FanDuel and DraftKings forced to repay
users that lost money playing its real-money fantasy contests.
The agreement also
includes a provision to drop all cases should New York law be changed to
specifically legalise DFS. Several differing bills are currently active in the
state legislature, which runs until June. Two bills would class DFS as a form of
gambling, while another two would specifically exempt it from legislation
relating to games of chance. Another bill looks to amend the state constitution
to allow paid fantasy contests.
“I’m pleased to
announce 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,” Schneiderman said of the
“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
“Regardless, our key
claims against the companies for false advertising and consumer fraud are not
affected by the agreement and will continue.”
DraftKings thanked its
players in the state, and pledged to continue fighting for DFS legistlation:
“We are an industry leader in technology, innovation and consumer protections,
and we are grateful to the hundreds of thousands of New Yorkers who have
enjoyed playing fantasy sports on DraftKings for the last 4 years.
“We will continue to
work with state lawmakers to enact fantasy sports legislation so that New
Yorkers can play the fantasy games they love.”
FanDuel added that New
York was a “critical” state, with the company headquartered in Manhattan and
employing “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,” it explained.
added that New Yorkers will now be unable to deposit funds or enter paid
contests, but can withdraw existing balances at any time, as has always
been the case. All contests that are already live and active will take place as