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New York judge grants preliminary injunction against daily fantasy sites

11 December 2015

DraftKings and FanDuel are "illegal gambling operations" that "subject the public to fraudulent perceptions."

That's what a New York Supreme Justice Judge said today when he granted the New York State Attorney General's preliminary injunction against DFS operators, a devastating blow to the entire industry and its millions of customers in the Empire State.

The decision comes as of a result of cease-and-desist orders sent to the two DFS industry giants on Nov. 10 by New York State Attorney General Eric Schneiderman, and 16 days after Judge Manuel Mendez heard both sides' arguments and ended the day-before-Thanksgiving session by saying he would have a ruling "very soon."

DraftKings, which unlike FanDuel never stopped operating in New York throughout the entire ordeal, appealed the decision and following a 2 p.m. hearing today, the two companies were granted a temporary emergency stay, which means they can remain fully operational through the end of the calendar year.

DraftKings sent out a statement that said, “We are disappointed with the Court’s decision, and have filed a notice of appeal and an expedited motion to stay the Court’s decision, pending our appeal, in order to preserve the status quo. This immediate stay was granted, so we will remain fully operational in New York.

"We look forward to a full and fair hearing and are confident we will demonstrate clearly to the Court why we should be able to continue to offer our DFS games in New York permanently.

"We are encouraged by our dialogue this week with New York state legislators. We look forward to continuing that conversation."

According to renowned gaming lawyer Daniel Wallach, ultimately the case is "headed to NY's highest court: the Court of Appeal. The 1st Dep't Appellate Division will not be the final word."

Wallach went on to point out that Mendez's claim that the preliminary injunction "is not a final determination of the merits and rights of the parties" provided hope for the DFS industry. Chances are, we are heading for a drawn-out trial that will determine the legality of daily fantasy sports.

Today's developments were a setback for FanDuel and DraftKings, but the emergency stay they received was a nice consolation prize since 10% of their customer base resides in New York and would have meant a loss of an estimated $35 million in combined annual revenue, 13% of the nation's fantasy sports market, according to Eilers Research.

But today's decision will still more than likely have reverberating effects in other states that have scheduled upcoming hearings to discuss the legality of DFS, including California, another state that is prime ground for players.

In a statement released by the New York Attorney General office, Schneiderman said, "We are pleased with the decision, consistent with our view that DraftKings and FanDuel are operating illegal gambling operations in clear violation of New York law. I have said from the beginning that my job is to enforce the law, and that is what happened today."

New York judge grants preliminary injunction against daily fantasy sites is republished from Online.CasinoCity.com.
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Best of Gary Trask
Gary Trask

Gary serves as Casino City's managing editor and has more than 20 years experience as a writer and editor.

A member of the inaugural Poker Hall of Fame Media Committee, Gary enjoys playing poker and blackjack, but spends most of his time sitting in the comfy confines of the sportsbook when in Las Vegas.

The Boston native is also a former PR pro in the golf-casino-resort industry and a fanatical golfer, allowing his two favorite hobbies - gambling and golf - to collide quite naturally.

Contact Gary at gary@casinocity.com and follow him on Twitter at @CasinoCityGT.

Gary Trask Websites:

twitter.com/#!/casinocityGT
Gary Trask
Gary serves as Casino City's managing editor and has more than 20 years experience as a writer and editor.

A member of the inaugural Poker Hall of Fame Media Committee, Gary enjoys playing poker and blackjack, but spends most of his time sitting in the comfy confines of the sportsbook when in Las Vegas.

The Boston native is also a former PR pro in the golf-casino-resort industry and a fanatical golfer, allowing his two favorite hobbies - gambling and golf - to collide quite naturally.

Contact Gary at gary@casinocity.com and follow him on Twitter at @CasinoCityGT.

Gary Trask Websites:

twitter.com/#!/casinocityGT