Back in November of last year, New York Attorney General Eric Schneiderman decided to send cease and desist orders to FanDuel and DraftKings, essentially stopping daily fantasy sports contests from running in the state. For some time now, the state has been considering the activity and this weekend, a deal was reached within legislation that will allow the websites offering DFS contests to be back in action.

The sites were shut down for being in violation of the gambling laws of the state, with FanDuel and DraftKings maintaining they were doing nothing wrong. The office of the Attorney General determined that DFS was gambling instead of a game of skill which is the common argument DFS operators face around the United States. Within the state of New York, gambling is restricted to racetracks and site-specific casinos.

In New York, the main question surrounding DFS is whether or not the prize money created from the entry fees to the contests were based on the knowledge of sports by the individuals taking part or if winners were simply getting lucky.

During DFS contests, players have to create a roster of athletes in the real world and have a salary cap that is predetermined, to do so. The best athletes will have a higher salary and the performance of the athlete in the real world will determine the DFS player’s final score for their team.

Those in favor of New York allowing DFS argued that creating a winning team does require knowledge of the sport. Those against argued that DFS is similar to placing a wager at the roulette table and hoping the right number is chosen.

Schneiderman released a statement on Saturday on the passage of DFS legislation within the state, commenting that his job is to enforce the law. Now that legislators have amended the law to legalize daily fantasy sports contests, it is now his job to enforce and defend the law as it stands. Schneiderman also stated that despite the new amendments to the gambling laws, his office will continue to pursue their claims that FanDuel and DraftKings were previously engaged in false advertising and consumer fraud.

Within the language of the new law, it states that sites that offer DFS will be taxed 15% on gross revenues, which is a lower amount than the casinos are taxed. Gaming options will be limited to professional sports and will exclude high school and college contests. Players will have to be at least 18 to take part. Any employees of the DFS companies will also be excluded. Any tax revenues generated will be added to the state lottery fund.

Andrew Cuomo, the Governor of New York, now has to sign the bill into law to make the changes official. According to several reports, Cuomo was working with lawmakers to draft the new legislation and is expected to sign the bill into law.

New York legislature reaches deal with daily fantasy sports sites was last modified: June 19th, 2016 by Marie Kelley