UPDATE, 12:30 PM: FanDuel has joined fellow fantasy sports site DraftKings in fighting the Attorney General of New York state in the courts. This is an action seeking a declaratory judgment and injunctive relief to prevent the New York AG Eric Schneiderman from pursuing further efforts to shut down FanDuel’s enormously popular fantasy sports activities in New York state,” said the complaint filed by John Kierman of NYC’s Debevoise & Plimpton firm Friday.
FanDuel’s paperwork filed in the New York Supreme Court is very similar to what DraftKings filed earlier today, including allegations that Schneiderman’s office went too far in its pursuit of them.
“On information and belief, the NYAG directly contacted FanDuel’s payment processors, pressuring them outside the judicial process to cease providing service to FanDuel unless FanDuel immediately suspends business in the New York market,” says the 17-page filing (read it here). “These actions were intended to immediately disrupt FanDuel’s New York business adversely, and they have done so.”
Instead of responding directly to FanDuel’s legal action, Schneiderman’s office simply updated its press release of earlier today (see it below).
PREVIOUS, 8:54 AM: With a top legal team from Gibson, Dunn & Crutcher in its corner, daily fantasy sports site DraftKings today hit back against efforts by New York Attorney General Eric Schneiderman to shut down the site and rival FanDuel in the Empire State. “The Attorney General, misreading New York’s gambling laws, is attempting to bully DraftKings … and its vendors into immediately shutting down DraftKings’ New York operations before it even has a chance to defend itself,” asserts a petition filed this morning in NY State Supreme Court (read it here). “The Attorney General’s actions constitute a shocking overreach.”
“He has unleashed an irresponsible, irrational, and illegal campaign to destroy a legitimate industry, intending to deprive hundreds of thousands of New Yorkers of the use and enjoyment of these services,” the request for an emergency injunction adds. “Adding insult to injury, he has done so in defiance of New York law, which plainly permits games of skill such as DFS.” Friday’s filing follows days of DraftKings and FanDuel users and fans protesting outside the NY AG’s offices.
Schneiderman issued the following statement Friday after DraftKings made its filing:
“The Attorney General’s job is to enforce New York State law, and the law here is clear. Online sports gambling sites are illegal in New York. DraftKings and FanDuel are operating illegal sports betting websites under New York law, causing the same kinds of social and economic harms as other forms of illegal gambling. As a result, our office issued a cease and desist letter to stop them from violating state law by accepting bets from people in New York. Because both companies have refused to follow the law in our state, we will take action to enforce state law.”
On November 10, the NY AG sent cease-and-desist letters to the CEOs of both DraftKings and Fanduel telling them an investigation by his department had determined that the hugely popular sites were illegal under NY law. “The Constitution prohibits gambling in all forms not specifically authorized,” both letters said. Schneiderman gave DraftKings and FanDuel 5-days to reply with a reason why state, which has been a lucrative market for their business “should not initiate any proceedings.” Looks like DraftKings has and you can bet FanDuel aren’t far behind.