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HughPickens.com [hughpickens.com] writes:

The NYT reports that in a major blow to a multibillion-dollar industry that introduced sports betting to legions of young sports fans, the New York State attorney general has ordered the two biggest daily fantasy sports companies, DraftKings and FanDuel, to stop accepting bets from New York residents, saying their games constituted illegal gambling under state law [nytimes.com]. “It is clear that DraftKings and FanDuel are the leaders of a massive, multibillion-dollar scheme intended to evade the law and fleece sports fans across the country,” says NY attorney general, Eric T. Schneiderman, “Today we have sent a clear message: not in New York, and not on my watch.”

Fantasy sports companies contend that their games are not gambling because they involve more skill than luck and were legally sanctioned by a 2006 federal law that exempted fantasy sports from a prohibition against processing online financial wagering. “Fantasy sports is a game of skill and legal under New York state law," says FanDuel [forbes.com]. "This is a politician telling hundreds of thousands of New Yorkers they are not allowed to play a game they love and share with friends, family, co-workers and players across the country.” The attorney general’s office also said that ads on the two sites “seriously mislead New York citizens about their prospects of winning.” State investigators found that to date, “the top 1 percent of DraftKings winners receive the vast majority of the winnings.” Schneiderman’s investigation was spurred after reports arose that a DraftKings employee used internal data to win $350,000 on rival site FanDuel [nytimes.com], which the operators denied. While both companies had allowed employees to place bets on the others site, they have since banned such practices.

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