Court Rules Fantasy Sports Contests Are Illegal Gambling

February 7, 2020

Daily fantasy contests like those operated by FanDuel and DraftKings face an uncertain future in New York after an appellate court ruled Thursday that a 2016 law legalizing such games violated a constitutional prohibition on gambling. The court upheld a lower court’s ruling that the Legislature unlawfully authorized the activity by classifying it as a game of skill, not chance.

The ruling, which upholds a 2018 lower court decision, is now likely headed to the state’s top court the Court of Appeals.

“We’re very gratified by the decision,” said attorney Neil Murray, who represents the group that brought the lawsuit. “We think the integrity of the New York state Constitution has been upheld.”

It’s not clear yet whether players will be able to continue to participate in the contests pending the next appeal. The contests have continued since the last ruling.

“The reason New York state has a constitutional prohibition on commercialized gambling promoted by the state is because it’s a form of consumer financial fraud,” Les Bernal, national director of Stop Predatory Gambling, said Thursday. “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.”

The state Gaming Commission, which regulates casino gambling, lotteries, horse-racing and similar activities, is reviewing today’s ruling, spokesman Brad Maione said.

Daily Fantasy Sports allow players to assemble teams of players in sports such as football or baseball and use their in-game statistics to compete with other teams.

Daily Fantasy Sports are different from sports betting at casinos or sportsbooks, which became legal in New York and other states following a U.S. Supreme Court ruling in 2018.

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