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