US DFS market leaders FanDuel and DraftKings are reported to be reviewing their legal options with regards to this week’s issuing of a ‘cease & desist’ orders by New York Attorney General Eric T Schneiderman.
Following its one month investigation into DFS services provided by FanDuel and DraftKings, the New York AG has concluded that DFS contests and competitions can be defined as sports betting which is therefore in breach of US internet regulations.
The New York AG has demanded for both operators’ to terminate their services to New York state consumers.
Both operators reacted quickly to Schneiderman statement, outlining that fantasy sports had been played legally in New York for a number of years.
Today DraftKings PR representatives sent out the following statement to the media
DraftKings is working with the international law firm Gibson, Dunn & Crutcher LLP on all civil matters, investigations and regulatory inquiries, including the current situation in New York. We intend to pursue this fight to the fullest to ensure that hundreds of thousands of New York fantasy sports fans can continue to play the games they love”.
Main competitor FanDuel also stated that it would challenge the decision of the New York AG, stating that under current laws its consumer services were completely legal.
The New York Times reports that the state is the largest individual market for the operators, with combined player pool of 1.1 active users representing a total 13% of the operators’ current customer base.
Having served FanDuel and DraftKings with cease & desist orders, it remains uncertain whether the New York AG will order US banks and payment processors to stop consumer transactions with the DFS operators, a move that would deeply impact the operators day to day services.