FanDuel & DraftKings Denied TRO By NY Courts Over State Ban – Update

UPDATE, 3:20 PM: A New York Supreme Court judge has rejected DraftKings and FanDuel’s request today for a temporary restraining order over efforts by the Attorney General of the Empire State to shut them down. Judge Manuel Mendez made his ruling this afternoon, mere hours after the rival fantasy sports sites filed their latest paperwork.

The court will have a hearing on November 25 on DraftKings and FanDuel’s fight against NY AG Eric Schneiderman that they are gambling sites operating outside the laws of the state. “The AG assured the Court he will take no action against DraftKings or its business partners before then,” said a spokesperson for the company after Mendez’s ruling. “On that record, and because there will be an emergency hearing next week, the Court determined that no TRO was necessary. We are confident in our legal position, and look forward to our day in court next week. As a result, we intend to continue operating in New York.”

Still, I wouldn’t bet this is going to end without a long fight.

PREVIOUS, 11:49 AM: Their ads were all over sporting events on TV this weekend, but today the besieged fantasy sports sites FanDuel and DraftKings are requesting a temporary restraining order against New York Attorney General Eric Schneiderman’s efforts to shut them down in one of their biggest markets. “FanDuel requests that the Court set an expedited briefing and hearing schedule on FanDuel’s motion for a preliminary injunction and restrain the NYAG from effectively foreclosing FanDuel’s business with New York customers,” FanDuel said in a filing Monday morning in New York Supreme Court (read it here).

“Today we filed a motion in the Supreme Court of the State of New York, seeking an order temporarily restraining the New York Attorney General from taking any action to enforce the cease and desist letter sent to DraftKings last week,” a DraftKings spokesperson said about their similar action today. “We believe this TRO is necessary and warranted to protect DraftKings’ business while we pursue our legal action to prevent the New York Attorney General from denying New Yorkers the right to continue playing the daily fantasy sports games they love.”

In their own filing for a TRO (read it here), DraftKings added, “This Court should not allow the Attorney General to destroy a business that has been openly and legally operating in the state for years without due process of law.”

There has been no formal response from NY AG Eric Schneiderman’s office on today’s filings, which followed from the cease-and-desist letters sent on November 10 to the sites’ CEOs. However, the NY AG did just put this segment from HBO’s’ Last Week Tonight With John Oliver last night on the matter up on social media:

Schneiderman said last week that “DraftKings and FanDuel are operating illegal sports betting websites under New York law” and vowed to “take action to enforce state law,” if necessary. “As a result of these efforts, FanDuel is now unable to accept deposits from its customers in New York, causing incalculable, immediate and irreparable harm to FanDuel’s business,” the company claimed in its TRO application Monday. FanDuel has stopped taking new orders in New York since Friday, but DraftKings still is accepting new customers to the 500,000-plus the two have in the Empire State.

With both DraftKings and FanDuel hitting the courts on November 13 with requests for emergency injunctions, this is the second set of legal paperwork from the fantasy sports sites. Both companies have the likes of Time Warner Cable, Fox and Comcast as investors as well as business relationships with the NBA and other sports leagues. As any viewers of football or basketball will see, DraftKings and FanDuel also flood broadcasts with ads and sponsorships worth hundreds of millions to the networks.

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