Adam Rubin Retweeted
Darren Rovell ;@darrenrovell
BREAKING: NY Attorney General says daily fantasy is gambling & illegal, says DraftKings & FanDuel must cease operating & taking action in NY
Schneiderman demanded DraftKings and FanDuel, the two industry giants, stop accepting "wagers" from New York residents and discontinue operations in the state. Link - ( New Window )
But FanDuel is headquartered in New York, having just opened a new 40,000 square foot office and while DraftKings is set up in Boston, it too also has a new 21,000 square foot satellite office in Manhattan.
Both companies also want to protect the New York customer base. According to industry research firm Eilers Research, New York has the highest number of daily fantasy participants of any state.
Advertising for DraftKings and FanDuel can be prominently seen throughout New York City, including in subway stations and on street vendors. New York is also the site of some of the biggest team sponsorship deals. DraftKings has a sizeable deal with Madison Square Garden that includes on-court signage at Knicks and Rangers games, as well as a fantasy lounge. The deal also gives DraftKings the main sponsorship on the WNBA's New York Liberty jersey.
DraftKings also has deals with the New York Giants and New York Yankees, whose hospitality company Legends is an investor in the business. FanDuel has advertising deals with the Brooklyn Nets, who have the company's logos plastered on the floor by the bench and behind the players, as well as the New York Jets.
While the two daily fantasy sites thrived using UIGEA as the justification for their legality, state law takes precedent over federal law, in this case. Media investors like Fox (DraftKings), Time Warner, NBC Sports Ventures and Comcast Ventures (FanDuel) poured hundreds of millions of dollars into these companies, as did heavyweights KKR and Google Capital. ESPN accepts advertising from FanDuel and DraftKings, but does not own equity in either company.
Although the major sports have anti-gambling policies, Major League Baseball, the National Hockey League and the NBA all took equity positions in daily fantasy. The NFL does not have a stake in any daily fantasy company, but two of its owners, Robert Kraft of the New England Patriots and Jerry Jones of the Dallas Cowboys, own an interest in DraftKings.
Havent seen the letter, but a cease and desist letter is just a demand. If they refuse, my guess is his power is to initiate a lawsuit. However, he can use a special proceeding to very rapidly accelerate the case (for the lawyers and law-knowledgeable folks out there, he is empowered under Exec Law 63(12) to sue to enjoin persistent illegality, and may do so by means of an Article 4 proceeding, where the respondent has as few as 5 days from filing suit to respond to what is effectively a summary judgment motion; I've represented several clients in AG consumer fraud proceedings).
Havent seen the letter, but a cease and desist letter is just a demand. If they refuse, my guess is his power is to initiate a lawsuit. However, he can use a special proceeding to very rapidly accelerate the case (for the lawyers and law-knowledgeable folks out there, he is empowered under Exec Law 63(12) to sue to enjoin persistent illegality, and may do so by means of an Article 4 proceeding, where the respondent has as few as 5 days from filing suit to respond to what is effectively a summary judgment motion; I've represented several clients in AG consumer fraud proceedings).
But isn't this more than a civil matter? Isn't he advising the companies that they are subject to criminal prosecution under Article 225 of the Penal Code?
When Nevada said stop, you're gambling, they stopped, promptly.
But isn't this more than a civil matter? Isn't he advising the companies that they are subject to criminal prosecution under Article 225 of the Penal Code?
When Nevada said stop, you're gambling, they stopped, promptly.
I havent seen the letter. I dont see why he would have any more authority to "stop" an activity solely because he alleges it could be criminal. Nevada has a gaming commission, which is more akin to a regulator. The NY AG is the state's lawyer, but not really a regulator. If it was the Banking Commission telling banks not to process FD/DK transactions I'd buy into the idea of unilateral shutdown power more than the AG.
the horse has left the barn and they're aren't going to put it back in
Sure they can limit these two sites but there will be 1000 just like them springing up in their wake. There is too much $$$ involved to have this industry to die now.
Sure they can limit these two sites but there will be 1000 just like them springing up in their wake. There is too much $$$ involved to have this industry to die now.
You can mostly shut it down by threatening the major financial institutions or if necessary passing a bill prohibiting transfers to/from similar sites. Visa, Mastercard, Amex, and the banks. That would address new competition too.
It's the government if they want you shut down then you're shutdown...
But isn't this more than a civil matter? Isn't he advising the companies that they are subject to criminal prosecution under Article 225 of the Penal Code?
When Nevada said stop, you're gambling, they stopped, promptly.
I havent seen the letter. I dont see why he would have any more authority to "stop" an activity solely because he alleges it could be criminal. Nevada has a gaming commission, which is more akin to a regulator. The NY AG is the state's lawyer, but not really a regulator. If it was the Banking Commission telling banks not to process FD/DK transactions I'd buy into the idea of unilateral shutdown power more than the AG.
If you start a numbers operation out of your house or corner office in NY, the police can show up with a warrant, confiscate records as evidence and arrest those they have probable cause to believe are participating in the Article 225 illegality. That brings a stop to the activity. I'm not seeing the distinction.
Having been advised by the AG, seems to me burden is on the companies to seek injunctive relief against the police showing up at the door.
David Payne PurdumVerified account
DraftKings tells me it is not leaving the New York market and plans to fight today's ruling by the attorney general.
I see a distinction between the AG shutting you down and the police seizing evidence located within the state that would have the practical effect of putting you out of business. Is the AG going to seize these sites' servers (which I assume are mirrored in 3-5 locations around the world)? But I honestly dont know a lot about the criminal side of things.
Do you have a link to the letter? Cant seem to find it.
I see a distinction between the AG shutting you down and the police seizing evidence located within the state that would have the practical effect of putting you out of business. Is the AG going to seize these sites' servers (which I assume are mirrored in 3-5 locations around the world)? But I honestly dont know a lot about the criminal side of things.
Do you have a link to the letter? Cant seem to find it.
I couldn't access the doc that sphinx might have linked so here's another link. The AG does state an intention to seek injunctive relief under the provisions you mentioned. Also includes copious references to Article 225 of the Penal Code as the underlying authority.
If the companies are in violation of Article 225, seems to me they are subject to immediate criminal prosecution as any other citizen would be, but the practical resolution may well be the AG's injunctive proceeding. Link - ( New Window )
just ban those goddamm commercials in NY. I want to punch those guys in the face.
I have no problem with idiots losing their money but I support anything that gets those commercials off the air during Giants games. I actually DVRed the second half and watched it fifteen minutes later so I could ff thru the commercials
RE: RE: the horse has left the barn and they're aren't going to put it back in
Sure they can limit these two sites but there will be 1000 just like them springing up in their wake. There is too much $$$ involved to have this industry to die now.
You can mostly shut it down by threatening the major financial institutions or if necessary passing a bill prohibiting transfers to/from similar sites. Visa, Mastercard, Amex, and the banks. That would address new competition too.
They couldn't outlaw online poker, so that's how they shut them down. Stuck into a port security bill too. A gift from the outgoing 2006 Congress.
The government probably doesn't get a cut from them like they do
Thanks for the link. I've gotten those letters before (on behalf of clients). It's purely a civil enforcement matter, as presented there. The criminal references are simply to establish the underlying "illegality" empowering the AG to act. To the best of my knowledge, the Economic Justice Division does no criminal work. (Also somewhat surprised that the still have the Internet Bureau but that's an aside).
Sure they can limit these two sites but there will be 1000 just like them springing up in their wake. There is too much $$$ involved to have this industry to die now.
I have fun with DFS. I play leagues with my friends for 10$-20$ buy ins. I play some big pools and certain types of leagues on there. I've made a little money (like $100), and had some fun on Sunday rooting for players in games. I definitely think there's skill involved, as I nearly never come in the bottom half of a 50/50 game because I tend to put thought into the players I'm playing (injury can mess it up though).
I hope they don't shut it down. The commercials are fucking annoying, though.
Someone, somewhere will figure it out and make it happen if these two sites are shut down.
You can buy movies online to a dollar or two, you can buy the latest music recording for about the same amount, you can play poker on line... if there is money to be made, someone will do it. FF? There is a TON of cash out there... someone will figure it out if the two sites are closed.
But as someone said above, give the government a cut and they'll be happy. It's all about the money.
Betting on horses
Lottery
Scratch off lottery
Gaming machines at certain places(typically horse racing tracks)
Casinos on Indian reservations
oh, and they are building a Casino in Schenectady
...but Daily Fantasy is illegal
Seems logical
I'm not sure about indian casinos, but in all those other things, the common denominator is that the state gets their cut and gave them a license. And they don't claim to NOT be gambling to avoid that.
I don't bet on these daily leagues but I know one thing
New York State already takes way too much of our money. Most people are betting $5.00 a week. This is just another opportunity from our government to steal our money and blow it.
are just anti-gambling regulation points, which is totally fair. But the prohibition is in the NYS Constitution and penal code, and I think the case that DFS is gambling is very, very strong.
If a business wants to do something that is illegal, it should try to get the law changed. Breaking the law is not a business model we should support. I feel the same way about Uber. It's a very smart product, but they've got to comply with local licensing, labor, insurance, and wage & hour laws even if they think the laws are dumb/outdated.
nobody gave a crap about DK, Fanduel, Draft street (when it existed) until it became a billion dollar industry and NOW its illegal. They see all this money being spent and know they need to get their hand in the pie.
I caught some of the Islanders' pregame show last night
And I don't know if it was FanDuel or Draft Kings, but their use of advertising was bad news. Probably the first time I've ever thought these companies were "slimy" and not just fulfilling a vacant need from fans.
They were previewing "key players" in the game, but instead of relevant stats beneath their photos, there was dollar values. And the announcer was like "You can have Johnny Boychuck for just 7K, sign up for fan duel today!" It was a god damn fantasy auction during the pregame show.
That's where my line gets drawn with the fantasy bullshit.
Next you'll tell us that every week you can beat your friends. Every Week.
Link - ( New Window )
Both companies also want to protect the New York customer base. According to industry research firm Eilers Research, New York has the highest number of daily fantasy participants of any state.
Advertising for DraftKings and FanDuel can be prominently seen throughout New York City, including in subway stations and on street vendors. New York is also the site of some of the biggest team sponsorship deals. DraftKings has a sizeable deal with Madison Square Garden that includes on-court signage at Knicks and Rangers games, as well as a fantasy lounge. The deal also gives DraftKings the main sponsorship on the WNBA's New York Liberty jersey.
DraftKings also has deals with the New York Giants and New York Yankees, whose hospitality company Legends is an investor in the business. FanDuel has advertising deals with the Brooklyn Nets, who have the company's logos plastered on the floor by the bench and behind the players, as well as the New York Jets.
While the two daily fantasy sites thrived using UIGEA as the justification for their legality, state law takes precedent over federal law, in this case. Media investors like Fox (DraftKings), Time Warner, NBC Sports Ventures and Comcast Ventures (FanDuel) poured hundreds of millions of dollars into these companies, as did heavyweights KKR and Google Capital. ESPN accepts advertising from FanDuel and DraftKings, but does not own equity in either company.
Although the major sports have anti-gambling policies, Major League Baseball, the National Hockey League and the NBA all took equity positions in daily fantasy. The NFL does not have a stake in any daily fantasy company, but two of its owners, Robert Kraft of the New England Patriots and Jerry Jones of the Dallas Cowboys, own an interest in DraftKings.
One you lose money with.
The other you lose money with and is illegal.
Clearly the jewel of draftkings' sponsorship portfolio.
But isn't this more than a civil matter? Isn't he advising the companies that they are subject to criminal prosecution under Article 225 of the Penal Code?
When Nevada said stop, you're gambling, they stopped, promptly.
Right to use hard core drugs... gamble... commit suicide if you want.... that's another argument.
But if this is legal, I sure as shit know sports gambling should be too.
But isn't this more than a civil matter? Isn't he advising the companies that they are subject to criminal prosecution under Article 225 of the Penal Code?
When Nevada said stop, you're gambling, they stopped, promptly.
I havent seen the letter. I dont see why he would have any more authority to "stop" an activity solely because he alleges it could be criminal. Nevada has a gaming commission, which is more akin to a regulator. The NY AG is the state's lawyer, but not really a regulator. If it was the Banking Commission telling banks not to process FD/DK transactions I'd buy into the idea of unilateral shutdown power more than the AG.
Ban them please !!!
Exactly. You would think they would have more important things to worry about.
You can mostly shut it down by threatening the major financial institutions or if necessary passing a bill prohibiting transfers to/from similar sites. Visa, Mastercard, Amex, and the banks. That would address new competition too.
Quote:
But isn't this more than a civil matter? Isn't he advising the companies that they are subject to criminal prosecution under Article 225 of the Penal Code?
When Nevada said stop, you're gambling, they stopped, promptly.
I havent seen the letter. I dont see why he would have any more authority to "stop" an activity solely because he alleges it could be criminal. Nevada has a gaming commission, which is more akin to a regulator. The NY AG is the state's lawyer, but not really a regulator. If it was the Banking Commission telling banks not to process FD/DK transactions I'd buy into the idea of unilateral shutdown power more than the AG.
If you start a numbers operation out of your house or corner office in NY, the police can show up with a warrant, confiscate records as evidence and arrest those they have probable cause to believe are participating in the Article 225 illegality. That brings a stop to the activity. I'm not seeing the distinction.
Having been advised by the AG, seems to me burden is on the companies to seek injunctive relief against the police showing up at the door.
DraftKings tells me it is not leaving the New York market and plans to fight today's ruling by the attorney general.
Do you have a link to the letter? Cant seem to find it.
Do you have a link to the letter? Cant seem to find it.
I couldn't access the doc that sphinx might have linked so here's another link. The AG does state an intention to seek injunctive relief under the provisions you mentioned. Also includes copious references to Article 225 of the Penal Code as the underlying authority.
If the companies are in violation of Article 225, seems to me they are subject to immediate criminal prosecution as any other citizen would be, but the practical resolution may well be the AG's injunctive proceeding.
Link - ( New Window )
I have no problem with idiots losing their money but I support anything that gets those commercials off the air during Giants games. I actually DVRed the second half and watched it fifteen minutes later so I could ff thru the commercials
Quote:
Sure they can limit these two sites but there will be 1000 just like them springing up in their wake. There is too much $$$ involved to have this industry to die now.
You can mostly shut it down by threatening the major financial institutions or if necessary passing a bill prohibiting transfers to/from similar sites. Visa, Mastercard, Amex, and the banks. That would address new competition too.
They couldn't outlaw online poker, so that's how they shut them down. Stuck into a port security bill too. A gift from the outgoing 2006 Congress.
So this is about the state wetting their beak.
This is all about building his name for the next office that he doesn't deserve
How is online poker doing? Serious question.
Lottery
Scratch off lottery
Gaming machines at certain places(typically horse racing tracks)
Casinos on Indian reservations
oh, and they are building a Casino in Schenectady
...but Daily Fantasy is illegal
Seems logical
This is all about building his name for the next office that he doesn't deserve
I hope they don't shut it down. The commercials are fucking annoying, though.
You can buy movies online to a dollar or two, you can buy the latest music recording for about the same amount, you can play poker on line... if there is money to be made, someone will do it. FF? There is a TON of cash out there... someone will figure it out if the two sites are closed.
But as someone said above, give the government a cut and they'll be happy. It's all about the money.
Lottery
Scratch off lottery
Gaming machines at certain places(typically horse racing tracks)
Casinos on Indian reservations
oh, and they are building a Casino in Schenectady
...but Daily Fantasy is illegal
Seems logical
I'm not sure about indian casinos, but in all those other things, the common denominator is that the state gets their cut and gave them a license. And they don't claim to NOT be gambling to avoid that.
If a business wants to do something that is illegal, it should try to get the law changed. Breaking the law is not a business model we should support. I feel the same way about Uber. It's a very smart product, but they've got to comply with local licensing, labor, insurance, and wage & hour laws even if they think the laws are dumb/outdated.
Lottery
Scratch off lottery
Gaming machines at certain places(typically horse racing tracks)
Casinos on Indian reservations
oh, and they are building a Casino in Schenectady
...but Daily Fantasy is illegal
Seems logical
Online poker isn't illegal. But try and do it in NY.
They were previewing "key players" in the game, but instead of relevant stats beneath their photos, there was dollar values. And the announcer was like "You can have Johnny Boychuck for just 7K, sign up for fan duel today!" It was a god damn fantasy auction during the pregame show.
That's where my line gets drawn with the fantasy bullshit.