A New York State Judge in Albany dealt a Blow to New York’s Fantasy Sports Businesses on Friday by Ruling their Daily Contests were a Form of Gambling that the State Constitution Prohibits.
The Decision knocked down a 2016 State Law signed by Gov. Andrew Cuomo that said the offerings of Sites like DraftKings and FanDuel were permitted Games of Skill. Both Companies allow Players to Buy into Pools where they build Fantasy Rosters of Sports Figures and Win Prizes based on how they Perform. They said the Games aren’t Gambling because they relied on Players’ Skill.
Legislation was introduced and enacted after former Attorney General Eric Schneiderman Sued the Companies in 2015. In Court filings that year, FanDuel estimated it had 600,000 Users in New York, about 10% of its Total Customer Base.
Schneiderman’s Case was put on hold to give Lawmakers a chance to act, and Gov. Cuomo (D), Signed the Bill in August 2016. The Law declared that Daily Fantasy Sports were “not games of chance” and “do not constitute gambling” under the State’s Penal Law. However, Four Antigambling Advocates Sued in 2017.
Acting Supreme Court Justice Gerald Connolly said in his Ruling on Friday that an 1894 Amendment to the State Constitution gave a Broad Definition of Prohibited Gaming Activities, so although Daily Fantasy Sports Contests are “predominated by skill rather than chance,” they are indeed Gambling.
However, Judge Connolly Ruled that Lawmakers’ did have the Discretion to exclude Daily Fantasy Sports Contests from the Anti-Gambling Section of the State’s Penal Code, which the 2016 Law did.
The immediate effect of the Ruling is Unclear. Neil Murray, an Attorney for the Plaintiffs, said in an Email that Fantasy Sports Companies “should cease as the court unequivocally stated that [daily fantasy sports] is gambling which is prohibited by the Constitution and therefore the State can’t pass a law purporting to legalize and regulate it.”
A Spokesman for Gov. Cuomo, who along with the State’s Gaming Commission was named as a Defendant in the Suit, said the State is “reviewing the decision.”
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