New York Moves to Legalize Daily Fantasy Gambling
Over the past year, few have fought as hard or as vocally against daily fantasy websites as New York Attorney General Eric Schneiderman. Schneiderman's office was among the first to begin investigating sites like DraftKings and FanDuel, and soon the AG was demanding that the sites stop taking New Yorkers' money and even return money they had accepted previously. But the icy relationship between NY and DFS may be warming a bit.
The state legislature approved a bill that would legalize and regulate daily fantasy sites last week, perhaps looking for a piece of the billion-dollar online gambling pie. But no touchdown dance yet -- the bill still needs approval from the governor.
Feeling a Draft
DraftKings and FanDuel had taken quite a financial pounding since pulling up stakes in the Empire State: an estimated ten percent of all daily fantasy players resided in New York before the ban. Now players and sites alike are looking forward to the return of daily fantasy games in the nation's largest market.
But that return won't come without some strings attached. Daily fantasy operators will owe the state 15.5 percent of their revenue to operate, which could amount to around $6 million a year. Similar to state lottery proceeds, these funds will be earmarked for education. Additionally, highly skilled and high-volume players (i.e., the ones winning most of the contests as well as a lion's share of the money) will have to be clearly identified on the sites, perhaps an attempt to curb allegations of insider trading and manipulation.
Next Man Up
Schneiderman released a short statement regarding the state legislature's shift on daily fantasy, noting only, "the Legislature has amended the law to legalize daily fantasy sports contests, a law that will be my job to enforce and defend." The attorney general's office, however, is also investigating consumer protection claims against the major daily fantasy sites, and Schneiderman refused to relinquish those in the face of the proposed law, saying his office "will nevertheless continue to pursue our claims that DraftKings and FanDuel previously engaged in false advertising and consumer fraud."
Now it's up to New York Governor Andrew Cuomo to sign off on the new legislation. The New York Daily News reports he has yet to request the bill for his signature, and that once he does, he'll have 10 days to veto it or sign it into law.
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Related Resources:
- What's the Holdup With Daily Fantasy Sports in New York? Ask Gov. Cuomo (NY Daily News)
- DraftKings, FanDuel Ride the Pine During Congressional Daily Fantasy Hearings (FindLaw's Tarnished Twenty)
- Sports Leagues, Media Companies Drafted Into Daily Fantasy Lawsuits (FindLaw's Tarnished Twenty)
- Pro Athletes Demand Payment from Daily Fantasy Sites (FindLaw's Tarnished Twenty)