Daily fantasy contests such as those run by FanDuel and DraftKings are facing an unknown future in New York after an appeal court ruled Thursday that a 2016 law legalising such games violated a constitutional gambling prohibition.
The court upheld a ruling by a lower court that the legislature unlawfully authorised the activity by classifying it as a skill game, not chance.
The attorney Neil Murray, who represents the group that brought the lawsuit said: “We’re very gratified by the decision. We think the integrity of the New York state Constitution has been upheld.”
In 2016, Gov. Andrew Cuomo signed a bill that cleared the way for companies like DraftKings and FanDuel to operate in New York and be regulated. Earlier that same year, the two fantasy sports corporations had agreed to suspend their operations in New York in a settlement with then-Attorney General Eric Schneiderman, who had said their businesses equated to illegal gambling.
The the Stop Predatory Gambling group coordinated the lawsuit challenging the constitutionality of the law on behalf of four claimants who had suffered personal or family harm from gambling debts.
Les Bernal, national director of Stop Predatory Gambling, said on Thursday: “The reason New York state has a constitutional prohibition on commercialised gambling promoted by the state is because it’s a form of consumer financial fraud. This isn’t about people having a Super Bowl office pool. This is about state government cheating and exploiting people, contributing to the huge debt culture in the state.”
A spokesman for Attorney General Letitia James said the staff reviewed the decision and have yet to decide whether it would be brought before the highest court of the state, the Court of Appeals.
“We believe the legislative action authorising fantasy sports in New York was constitutional and in the best interests of taxpayers and fantasy sports fans,” DraftKings said in a statement.