Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES NEWS: New York AG issues cease-and-desist letters to FanDuel, DraftKings, (Nov 12, 2015)
Organizations Mentioned:DraftKings, Inc. | FanDuel | FanDuel Inc.
By Greg Hammond, J.D.
New York Attorney General Eric T. Schneiderman issued cease-and-desist letters to DraftKings, Inc. and FanDuel Inc. on Tuesday, demanding that the daily fantasy sports websites end their practice of illegally accepting wagers in New York.
Schneiderman’s office opened an investigation into DraftKings and FanDuel in October 2015, according to a November 11 news release. The reviews concluded that both companies’ operations constitute illegal gambling under New York law. In addition, the letters claim that the companies’ advertisements seriously mislead New York citizens concerning their prospects of winning.
“[U]nlike traditional fantasy sports, daily fantasy sports companies are engaged in illegal gambling under New York law, causing the same kinds of social and economic harms as other forms of illegal gambling, and misleading New York consumers,” Attorney General Schneiderman stated. “Daily fantasy sports is neither victimless nor harmless, and it is clear that DraftKings and FanDuel are the leaders of a massive, multi-billion-dollar scheme intended to evade the law and fleece sports fans across the country. Today we have sent a clear message: not in New York, and not on my watch.”
The letters to DraftKings and FanDuel serve as formal pre-litigation notices pursuant to New York’s deceptive acts and practices law—N.Y. General Business Law §§ 349 and 350. As such, the New York Attorney General’s office is considering bringing actions against the companies for misrepresenting that they comply with applicable laws; misrepresenting the likelihood that ordinary players will win a jackpot; misrepresenting the degree of skill implicated in the games; and misrepresenting that the companies’ games are not considered gambling.
DraftKings and FanDuel now have the opportunity, within five business days of receipt of the letters, to demonstrate why the New York Attorney General’s office should not initiate proceedings against them.
Companies: FanDuel Inc.; DraftKings, Inc.
News: StateUnfairTradePractices NewYorkNews