Daily fantasy sports (DFS) leader FanDuel has decided to exit the New York market, at least temporarily. The move comes a week after New York Attorney General Eric Schneiderman sent FanDuel, based in New York, and DraftKings, based in Boston, cease and desist letters, saying that they were engaging in illegal gambling.
The two daily fantasy sports companies filed temporary restraining orders (TRO) against Schneiderman on Monday morning in an effort to thwart Schneiderman’s order, but New York Supreme Court Justice Manuel Mendez denied the orders.
Both FanDuel and DraftKings have been resolute in their stance that DFS is legal in the state; it is legal according to a carve-out in the federal Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA). FanDuel tried to hold out and keep serving New York residents, but it ultimately decided that it wasn’t worth the legal risk for now. As of Tuesday at 2:30pm ET, New York players are no longer allowed to participate in any contests on FanDuel. FanDuel insists their money is safe, though, and can be withdrawn at any time.
FanDuel and DraftKings will appear in court on November 25th to fight the ruling and hopefully get the green light to continue operating in the Empire State. For now, though, New York FanDuel customers are going to have to wait and see what happens.
Below is FanDuel’s letter to its customers about what is going on, as published on the company’s website:
In FanDuel’s ongoing effort to fight for fantasy users across New York, we filed for a temporary restraining order yesterday that would allow users to keep playing on our site while the legal case was pending. The court did not issue the TRO but set a hearing for November 25th, ensuring that the legal situation will be promptly resolved.
As a result of that decision, we are temporarily suspending entry in paid contests for people located in New York as of 2:30 pm EST today, Tuesday, November 17th. This is in addition to the restrictions on deposits previously implemented. We believe that this restriction is temporary and we hope to be able to offer our paid contests to New Yorkers again very soon.
But for users who have questions about contests, please read below.
– If you entered into a FanDuel contest before 2:30pm EST on Tuesday, the contest will run, uninterrupted.
– As of Tuesday’s cut off, users in New York will be restricted from entering paid contests.
– As has been the case, all users in New York can and will absolutely be able to withdraw their money at anytime. However, we believe we will have an update from the Court in 10 days and hope to be able to offer paid contests to New Yorkers again. Users funds are and will remain secure.
We maintain, unequivocally, that FanDuel has always complied with state and federal law. We look forward to vindicating our position in court next week.
We will press on and fight to ensure that your right to play fantasy sports is protected, not just in New York, but across the nation. Please join us in this fight and sign the petition at www.fanduel.com/takeaction or https://www.fantasysportsforall.com/ if you have not yet done so.
