Attorney General

No Decision Yet In Daily Fantasy Sports Challenge

A state Supreme Court judge on Wednesday is yet to rule on whether to impose an injunction on the operations of daily fantasy sports websites DraftKings and FanDuel.

Judge Manuel Mendez heard arguments from both Attorney General Eric Schneiderman’s office as well as lawyers for fantasy sports companies as the state seeks to block their activities in New York, arguing they are providing a form of illegal gambling.

“Today, we presented compelling evidence that Daily Fantasy Sports competitions are as legal now as they have been for the past seven years that New Yorkers have been playing them,” DraftKings said in a statement. “We look forward to Justice Mendez’s ruling.”

DraftKings continues to operate despite a cease-and-desist letter from Schneiderman’s office issued earlier this month. Its rival, FanDuel, has restricted use for New Yorkers amid the legal challenge.

Fantasy sports websites insist players predominantly use skill to win cash prizes in selecting players. Schneiderman’s office has argued, as have officials in other states, fantasy sports relies on the luck of the actual performances.

“We were glad to have an opportunity to make our case to the court that DraftKings and FanDuel are operating illegal gambling operations in clear violation of the law, and we await the judge’s decision,” said Schneiderman spokesman Damien LaVera.

State lawmakers have introduced legislation in recent weeks that would classify fantasy sports as games of skill, which would be allowed under state law.

Gov. Andrew Cuomo has largely sidestepped the issue, saying he wants to see the legal process play itself out.

DraftKings Attorney: It’s A Question Of ‘Unlawful’ Gambling

Whether daily fantasy sports is ultimately allowed in New York could hinge in part on whether it is deemed to be “unlawful” gambling, DraftKings attorney David Boies said in a conference call with reporters.

In the call, Boies, a prominent lawyer who has represent Al Gore and major sports institutions, compared the activity of picking athletes to assemble on an ad-hoc roster to legally allowed skill games such as mahjong and video games.

“It’s a question of whether it’s unlawful gambling,” he said.

Attorney General Eric Schneiderman is seeking to block websites that provide daily fantasy sports such as DraftKings and competitor FanDuel, along with Yahoo, arguing these are predominantly games of chance, which are outlawed by the state Constitution’s gambling provision (exceptions through amendments have allowed for commercial casino gambling and pari-mutual horse racing).

Several state lawmakers have submitted legislation that would classify fantasy sports as a game of skill, while others have suggested more complex regulatory schemes will be needed.

FanDuel has limited access to New York users amid the legal dispute, while DraftKings continues to operate.

Boies told reporters in the call his client had no plans to close its operations before a court determination is made.

“All we are doing is continuing teh status quo, we’re not making any changes, until the legal process plays itself out,” he said. “From DraftKings standpoint, DraftkIngs has believed this is the right decision for the company, its employees, its investors and its customers.”

Griffo Blasts AG’s ‘Ridiculous’ Lawsuit

Republican Sen. Joe Griffo on Wednesday knocked Attorney General Eric Schneiderman’s lawsuit filed against the Utica City School District over its treatment of refugee students.

Schneiderman’s lawsuit claims the district has over the last several years created a system into which immigrant students are prevented from enrolling in Proctor High School and divert them to alternative education services that are apart from the general student program. The program funnels away not just newly arrived immigrants but students who had been living in the U.S. and recently transferred to the district.

The alternative programs, Schneiderman alleges, are in essence “roads to nowhere” with many of the students aging out or dropping out rather than completing academic credits for a high school equivalency.

“Every New Yorker under the age of twenty-one has a right to attend public school in the District in which they reside, regardless of immigration status or national origin,” said Attorney General Schneiderman. “Access to a quality education is the foundation of the American Dream. School districts cannot place arbitrary impediments and barriers in the way of immigrants and refugees who have struggled to achieve a better life for themselves and their families.”

Utica over the last several decades has drawn thousands of refugee immigrants, many of whom are Bosnian.

Griffo, who represents the Mohawk Valley city in the Senate, sees the situation much differently than Schneideramn.

“Instead of attacking a struggling school district that is already trying to do the best it can with the limited resources it has, the Attorney General should be focusing on issues that really matter, like cracking down on criminals, cyber-security threats and terrorism,” Griffo said. “This latest legal action smacks of retribution by the Attorney General because the Utica School District was wise enough to join other small cities in suing the state for not providing its students with fair and equitable funding. I am involved in efforts through the Legislature to fix this problem so schools like Utica get the full funding they deserve to best serve all students, but the Attorney General’s egregious and outrageous attack now on our admirable educators does nothing to help accomplish that goal.”

Former Assembly Candidate Arrested For Failure To File

AssemblyA Democratic former Assembly candidate was arrested on Wednesday after she failed to disclose her campaign finances, Attorney General Eric Schneiderman and Board of Elections Enforcement Counsel Risa Sugarman announced.

“Knowingly and willfully failing to file campaign finance disclosure reports with the New York State Board of Elections is a crime,” Schneiderman said. “My office will continue to work tirelessly to ensure that the public trust is not undercut by candidates for public office who fail to properly disclose their campaign’s financial activity.”

Michelle Adolphe is accused of not filing the legally required campaign finance reports in her campaign for Brooklyn’s 43rd Assembly district. She was arraigned in Albany City Court and later released. She was charged with three counts of misdemeanor knowing and willfully failing to file statements.

Adolphe is, by any measure, not a big fish: She finished third in a Democratic primary last year, having received 843 votes.

Still, Sugarman in a statement said it’s a matter of ensuring that political candidates disclose who and how their campaigns are being funded. More >

New York Users Cut Off From FanDuel

New York uses hoping to play in the upcoming slate of football games from the daily sports fantasy website FanDuel are out of luck.

The company on Tuesday announced it has restricted access to New York users amid its legal fight with Attorney General Eric Schneiderman, who is targeting the company along with DraftKings over whether such sites are “games of chance” — illegal gambling” — or legally allowed “games of skill.”

“As has been the case, all users in New York can and will absolutely be able to withdraw their money at anytime,” FanDuel said in a statement posted on its website Tuesday afternoon. “However, we believe we will have an update from the Court in 10 days and hope to be able to offer paid contests to New Yorkers again. Users funds are and will remain secure.”

Schneiderman earlier in the day filed an injunction to halt the companies from operating in New York. Meanwhile, both DraftKings and FanDuel are countersuing Schneiderman in court, while also pressing state lawmakers to pass a measure that would allow the daily fantasy sports.

DraftKings in a statement called Schneiderman’s push “an incomplete understanding” of how their company operates.

“We look forward to being afforded a full and fair opportunity to demonstrate why daily fantasy sports are legal under New York State law,” the company said. “We believe the Attorney General’s view of this issue is based on an incomplete understanding of the facts about how our business operates and a fundamental misinterpretation and misapplication of the law.”

Schneiderman Seeks Injunction Against FanDuel, DraftKings

schneidermanThe office of Attorney General Eric Schneiderman on Tuesday sought a preliminary injunction in state Supreme Court against daily fantasy sports websites DraftKings and FanDuel — a move that comes amid a broader debate over legality of the companies activities in New York.

The injunction comes after DraftKings unsuccessfully sought to block Schneiderman’s efforts to issue a cease-and-desist letter last week.

In the filings, Schneiderman’s office argues the operations of both websites are tantamount to gambling “games of chance” — as opposed to “games of skill” that would be allowed under the state’s constitution.

“Like any sports wager, a DFS wager depends on a “future contingent event” wholly outside the control or influence of any bettor: the real-game performance of athletes. A bettor can try to guess how athletes might perform, but no bettor—no matter how shrewd or sophisticated—can control or influence whether those athletes will succeed,” the filing states. “The moment a DFS player submits a wager, he becomes a spectator whose fate is sealed by the real-game performance of athletes. The rules of DFS make this relationship crystal clear.”

Schneiderman’s office also contends the companies behind the scenes have portrayed themselves as gambling entities.

“Meanwhile, the DFS contests are causing the precise harms that New York’s gambling laws were designed to prevent. Problem gamblers are increasingly being seen at Gamblers Anonymous meetings and at counselors’ offices addicted to DFS,” the filing states. “For DraftKings, at least, this should not come as a shock: records show that their customer service representatives have responded to pleas from self-described gambling addicts to close accounts and permanently ban them from the site.”

Both companies have filed counter legal challenges to Schneiderman’s effort, while FanDuel has restricted use for New York players when it comes to making new deposits during the legal argument.

Meanwhile, state lawmakers have introduced legislation that would classify fantasy sports operators as “games of skill” in order to regulate the companies under New York law.

DK_MOL.pdf by Nick Reisman

Judge Denies Fantasy Sports Injunction

A state Supreme Court judge on Monday denied an effort by fantasy sports website DraftKings to block a cease-and-desist order issued by Attorney General Eric Schneiderman.

In a statement, the company said the attorney general “assured” no action would be taken against DraftKings until an emergency hearing is held next week, a claim that Schneiderman spokesman Damien LaVera said was not true.

“The Court granted our order setting this case for an emergency hearing next Wednesday. The AG assured the Court he will take no action against DraftKings or its business partners before then. On that record, and because there will be an emergency hearing next week, the Court determined that no TRO was necessary,” the company said. “We are confident in our legal position, and look forward to our day in court next week. As a result, we intend to continue operating in New York.”

Schneiderman is attempting to block both DraftKings and FanDuel from operating in New York, arguing they are essentially gambling “games of chance” that is unconstitutional in New York.

FanDuel is also fighting the AG’s order, but has limited access to New York users when it comes to making new deposits.

DraftKings Seeks To Block Schneiderman’s Cease-And-Desist

DraftKings on Monday filed a motion in state Supreme Court that would temporarily block Attorney General Eric Schneiderman from the enforcement of a cease-and-desist order released last week against online fantasy sports.

“Today we filed a motion in the Supreme Court of the State of New York, seeking an order temporarily restraining the New York Attorney General from taking any action to enforce the cease and desist letter sent to DraftKings last week,” the company said in a statement. “We also requested an expedited hearing schedule to resolve this matter as quickly as possible. We believe this TRO is necessary and warranted to protect DraftKings’ business while we pursue our legal action to prevent the New York Attorney General from denying New Yorkers the right to continue playing the daily fantasy sports games they love.”

The company, along with competitor FanDuel, is suing Schneiderman over his effort to bar the sites from operating in New York. FanDuel, meanwhile, has decided to limits use for New York players while the legal questions are being sorted out.

Schneiderman’s office has contended daily fantasy sports activities constituted games of chance, which would be blocked under the state’s gambling laws.

Both companies have pushed back by arguing their operations are games of skill, while a measure introduced by Sen. Michael Ranzenhofer earlier in the day would classify the daily fantasy sports as such.

2015 11 16 Memorandum of Law ISO TRO.pdf by Nick Reisman

Bill Classifies Fantasy Sports As A Game Of Skill

A bill introduced on Monday in the state Senate would allow online fantasy sports as games of skill — a measure that comes amid Attorney General Eric Schneiderman’s effort to shut down the two largest promoters, FanDuel and DraftKings.

The measure backed by western New York Republican Sen. Michael Ranzenhofer would, in essence, carve out online fantasy sports websites from being classified as a “contest of chance” and would not be considered similar to traditional forms of gambling.

“This bill simply seeks to clarify, using federal language, that fantasy sports team activities are games of skill rather than games of chance,” the bill’s memorandum states. “Time and time again, New York has stood in the way, whether by overregulation or outright banning of activities that are legal and enjoyed in most states across the country. It is important at this time to clarify that participation in fantasy skill games is legal and to protect the rights of businesses and individuals who wish to engage in this type of commerce.”

Both FanDuel and DraftKings have filed legal challenges to Schneiderman’s cease-and-desist order, which was issued last week. Despite the countersuit, FanDuel on Friday announced it would seek to limit use of its website for New York-based participants.

Updated: Schneiderman spokesman Damien LaVera responds.

“DraftKings and FanDuel have hired a fleet of lobbyists to convince the Legislature to legalize their gambling operations,” he said. “How does that square with these companies’ insistence that their sites are presently legal?”

FanDuel Moves To Limit Access To New York Users

One of the sports fantasy websites at the center of a cease-and-desist fight with Attorney General Eric Schneiderman is taking steps to limit access to New York users, the company said in a statement.

In a letter to its customers, FanDuel announced that while the full slate of the coming weekend’s fantasy contests will run, the company will block new deposits from New York starting Friday.

New York users will be able to continue to withdraw money from winnings, the company added.

“We are honored to have helped build this community of fantasy players and will exhaust all legal options in our pursuit to continue to be a part of your lives,” FanDuel wrote in its letter to customers. “As such, it is with great disappointment that we will begin the process of limiting access to users located in New York while we pursue the opportunity to be heard in Court.”

Schneiderman this week sent cease-and-desist letters to FanDuel and DraftKings asking they block New York users from accessing the site given concerns over the violation of the state’s gambling laws (Both companies dispute the claim, insisting sports fantasy wagers are games of skill, not games of chance).

DraftKings, meanwhile, filed a legal challenge to Schneiderman’s cease-and-desist order and released a statement from former New Mexico Gov. Gary Johnson, the 2012 Libertarian Party nominee for president.

“The Attorney General’s unwarranted attack on fantasy sports is classic government overreach,” Johnson said in the statement from the company. “Government should protect freedom, not curtail it just because a politician wants to. When tens of millions of Americans want to engage in a fun, harmless activity, why is it any of the government’s business? There are plenty of laws on the books to protect citizens from fraud and abuse, if and when it occurs. Taking away the freedom of hundreds of thousands of New Yorkers is just wrong.”