NEW YORK (AP) — New York Attorney General Eric Schneiderman sent letters Tuesday to fantasy sports companies DraftKings and FanDuel saying he considered their daily contests to be illegal gambling. He threatened legal action unless they stop accepting play from New York.
Here are some questions and answers about what comes next in the burgeoning legal dispute:
Q: Have FanDuel and DraftKings stopped accepting contest entries from New York?
A: No. Both sites say it is business-as-usual for now. The letters sent by New York's attorney general give the companies five days to respond, taking them at least through the bulk of NFL games on Sunday. It isn't clear what will happen after that. Both companies have said they intend to fight any shutdown demand in court.
Q: What could the attorney general do if the companies reject his demand?
A: The most likely option would be to file a civil lawsuit asking a judge to order the companies to cease operations and impose fines. Another option would be to bring criminal charges, though the attorney general hasn't threatened that type of action. The companies could also go to court themselves and ask a judge to declare that their operations are legal.
Q: FanDuel is headquartered in New York City. DraftKings is based in Boston, but also has a New York office. Could the companies or their employees face legal action just for being in New York, even if they stop interacting with NY customers?
A: It isn't clear yet. The attorney general declined to answer this question.
Q: Is there any avenue available for these companies to get licensed as legal gambling operations in New York?
A: No. While there is legal gambling in the state at horse tracks and casinos, and in the state lottery, there is no process for adding games like this. That's different from Nevada, where gambling regulators ruled that licensed casinos could offer daily fantasy sports games. In New York, gambling is more restricted. It would take a change in state law.
Q: Has the attorney general targeted other fantasy sports operations?
A: Not yet. The letters only apply to the two companies. That doesn't mean other daily fantasy sports operators, like Yahoo and CBS, are in the clear. In his letters to FanDuel and DraftKings, Schneiderman left the door open for legal action against any companies that run and market games in a similar way. The wording of the letters suggests that the line between illegal gambling and legal sports fantasy play might depend on the details of how each game is organized and whether it is predominantly a game of skill or chance. He did say he had no problem with season-long fantasy sports leagues.