Draft Kings Slams New York's 'Hasty' Decision on Fantasy Sports

The attorney general of the state of New York failed to do his research and made a “hasty” decision when he declared fantasy football to be illegal gambling, Boston-based DraftKings said Tuesday.

“We are very disappointed that New York Attorney General Eric Schneiderman took such hasty action, especially since he did not take any time to understand our business or why daily fantasy sports are clearly games of skill,” Draft Kings officials said in a statement. “New York’s actions today are an unfortunate example of a state stifling innovation, technology and entrepreneurship and acting with out full and fair consideration of the interestes of consumers.”

Schniederman on Tuesday ordered DraftKings and competitor FanDuel to stop accepting fees from New Yorkers. The state deemed daily fantasy sports leagues a form of illegal gambling.

“Our investigation has found that, unlike traditional fantasy sports, daily fantasy sports companies are engaged in illegal gambling under New York law, causing the same kinds of social and economic harms as other forms of illegal gambling, and misleading New York consumers,” Schneiderman’s office said in a statement.

Daily fantasy sports players do not bet on sports contests. Instead, they pay a fee to select individual players to build a fantasy team and potentially win cash prizes based on the individual players’ statistics. Successful fantasy football players pore over statistics, weekly match-ups and past performances to draft the best players while staying within a virtual salary cap. It is not chance that a fantasy owner wins. It is his or her skill in identifying the best players and formulating a strategy to get them that determines the weekly outcomes.

“These are skill-based games that match sports fans against each other in a contest of sports knowledge and strategy that is fundamentally different from wagering on the performance of an individual player or the outcome of a particular game,” said Peter Schoenke, chairman of the Fantasy Sports Trade Association.

New York is the second state to go after fantasy sports recently, joining Nevada, which last week declared the game a form of gambling that requires a state license. Last month, Massachusetts Attorney General Maura Healey announced she is reviewing the legality of daily fantasy websites. Draft Kings and FanDuel then withdrew from Nevada, but don’t appear to be going quietly from New York.

“We strongly disagree with the reasoning in his decision and will examine and vigorously pursue all legal options available to ensure our over half a million customers in New York State can continue playing the fantasy sports games they love,” Draft Kings’ statement reads.