DraftKings and FanDuel fight New York DFS injunction

statue-of-liberty-267948_960_720Both DraftKings and FanDuel are asking the New York Supreme Court Appellate Division – First Department to overturn a preliminary injunction which ordered the companies to cease operating in the state from December 11th 2015.

In its own appeal DraftKings argued that the court, in siding with state Attorney General Eric Schneiderman, “abused its discretion” and committed several errors of law when it imposed the injunction.

Schneiderman stated that both these sites violated the law in that both are examples of illegal gambling. He argued this point by making reference to New York Penal Law Section 225, in which gambling is defined as wagering on a contest where “the outcome depends in a material degree upon an element of chance” or on a “future contingent event” not under the participant’s “control or influence.”

Judge Manuel Mendez imposed the injunction after Schneiderman’s office suggested that “a small number of professional gamblers profit at the expense of casual players.” Using this same logic DraftKings has put it that this in fact shows that fantasy sports is a game of skill, and not gambling, since those that possess the necessary skill set perform better.

The filing, which is 67 pages long, argues that: “The court applied the wrong legal standard, and ignored the undisputed evidence, in finding that daily fantasy sports contests are games of chance.”

The company also claims that, similar to horse owners paying fees to enter races, it collects entry fees as opposed to gambling stakes, and suggested that a host of other tournaments where random factors can make the outcomes unpredictable, such as dog shows and spelling bees, would be “criminalised” under Judge Mendez’s ruling. The brief noted: “Just as the horse owner competes based on the performance of his horse and jockey, so does the DFS player compete based on the performance of his selected fantasy team.”

The filing also put it that under such a ruling numerous other tournaments wherein random factors can make the outcomes unpredictable, such as spelling bees and dog shows, would be deemed illegal.

In a statement David Boies, Boies Schiller & Flexner LLP and DraftKings’ Attorney said: “Daily fantasy sports are skill-based games that are, and should be, legal. DraftKings contests are no less legal than season-long fantasy sports, which the Attorney General has repeatedly conceded are legal.”

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