Alabama’s attorney general is the
latest to declare daily
fantasy sports to be illegal gambling and to order the industry’s top
operators to cease and desist.
On Tuesday, Alabama Attorney
GeneralLuther Strange announced that he’d sent cease and desist
letters to bothDraftKings and FanDuel, ordering them to halt
their real-money operations in his state as of May 1.
Strange said his office had
concluded that DFS contests “are in fact illegal gambling under Alabama law.”
The state defines illegal gambling as any contest in which participants risk
something of value to win a prize, even if the activity in question involves a
degree of skill.
Strange acknowledged that DFS
involved some skill but said DFS players have no control over the performance
of the athletes they have added to their DFS rosters, and thus the outcome of a
DFS contest depends “to a large degree on chance,” which is “the very
definition of gambling under Alabama law.”
Strange’s pronouncement follows
similar rulings by AGs in Georgia, Hawaii, Illinois,
New York, Mississippi, Texas and Vermont,
all of whom have made their displeasure known since the DFS ‘data leak’ scandal
broke last fall. Nevada has taken a slightly different tack, saying DFS is
legal gambling but requiring
operators to apply for gambling licenses. Combined with the states that
already viewed DFS as illegal, a total of 12 states now deem DFS to be aginst the law.
Neither DraftKings nor FanDuel
responded immediately to Strange’s announcement. To date, DraftKings and
FanDuel have not
followed a strict pattern in their reaction to such rulings. The
companies have generally shown a willingness to exit states from which they
derive little revenue, while digging in their heels in more critical
jurisdictions. It was only late last month that both operators agreed
to leave New York, despite AG Eric Schneiderman having issued
his C&D way back in November.