DraftKings and FanDuel to Stay in New York, For Now!
December 14, 2015 1:32 pmOn December 11th, New York State Supreme Court Judge Manuel Mendez ordered DraftKings and FanDuel to cease their operations in New York pending the outcome of their upcoming high-profile court case. Judge Mendez even reserved some harsh words for the two companies, stating that the state has a duty to protect its residents from potentially harmful fantasy sports, and that this consideration far “outweighs any potential loss of business”.
Nevertheless, DraftKings and FanDuel subsequently took their case to state appellate Judge Paul Feinman (photo), and following an hour long hearing were granted a last minute reprieve until January 4th 2016. That is when a five-judge panel will hear arguments for and against fantasy sports and decide whether to shut the sites or not during their trial. As FanDuel explained last month:
“Daily Fantasy Sports contests have been played legally by New Yorkers for the past seven years and we believe this status quo should be maintained while the litigation plays out.”
Up until this year, DraftKings and FanDuel had been surging in popularity stateside, but a scandal involving insider trading, together with the companies’ blanket advertising campaign across all media, ended up drawing too much attention to the industry. As ThePostGame.com CEO David Katz explains:
“All of that cash created an arms race for users. If DraftKings and FanDuel had simply grown in a quieter, more organic way, they would have been much less scrutinized.”
Instead, the legality of daily fantasy sports has now come under increasing scrutiny from individual states, and as well as being banned in Nevada, DraftKings and FanDuel have decided to preempt future problems by blocking their activities in a number of other states, including Arizona, Iowa, Louisiana, Montana, and Washington State. Nevertheless, New York remains a key market for the industry and accounts for 12.8% of all U.S. players, followed by California (9.7%) and then Illinois (6.7%), according to research carried out by Eilers Research LLC.