Just hours after a judge ruled that DraftKings and FanDuel could not operate in New York pending their current court case, an appeals court has issued an emergency stay that will allow the sites to continue operating for the time being, as reported by several outlets.
Earlier in the day, a judge sided with New York Attorney General Eric Schneiderman who said the sites cannot operate in New York until a pending court case determines if daily fantasy is a form of gambling. Schneiderman has said that the sites violate state laws against gambling, calling daily fantasy a game of chance and not a game of skill.
“Our review concludes that DraftKings’/FanDuel’s operations constitute illegal gambling under New York law,” Schneiderman wrote in a letter.
While that case will only rule on the legality within the state of the New York, it is safe to assume that other states are watching closely to see the outcome before deciding how they will deal with the companies.
The attorney general’s investigation began after a report surfaced that said employees of the websites were winning a lot of money betting at the rival’s website.
Jason Robins, CEO of DraftKings, has said that daily fantasy is not gambling, arguing that it is a game of skill, not chance.
“If you randomly picked a fantasy lineup and played against someone who put thought into it, they would beat you 9 times out of 10, if not more,” Robins argued on ESPN. “So [daily fantasy is] pretty different, I think, from sports books where even though there is some advantage that can be had, the edges are so minimal that it is primarily chance-based.”
Several other states have also banned daily-fantasy sports to some degree, including Nevada, where DraftKings and FanDuel were order to shut down in October.
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