Murky Future for DFS after NY Court rules it illegal
By Ken Edwards, 11 November 2018
The New York Supreme Court has flung the future of Daily Fantasy Sports (DFS) in the state into disarray. After a ruling by the court that constitutes DFS as illegal gambling in the state, the future for the likes of FanDuel and DraftKings in New York is uncertain at this time.
In the short-term at least, nothing will change and you can continue to play DFS contests for real money in the state. The recent ruling might yet be deemed absolutely irrelevant, given the recent developments with legalized sports across the nation, but let’s quickly analyze how we got here.
NY Court Rules DFS ‘Gambling’, not ‘Games of Skill’
A state law that legalized DFS in New York back in 2016 was struck down in a decision by Albany County Supreme Court Justice Gerald Connolly on 29 October 2018.
Connolly said in his decision that DFS, an online game where users assemble virtual teams out of professional sports players, and either lose or win money based on their performances, is comparable to gambling, and therefore requires an amendment to the state constitution for legalization.
On the other hand, at the Federal level of government, DFS contests have been ruled to be games of skill.
The direct impact of judge’s the ruling is not yet clear, nor is it transparent. While Connolly deemed DFS contests unconstitutional, he also ruled state lawmakers had been working within their rights to exempt DFS from New York’s gambling law as a game of skill back in 2016.
This creates an uncertain environment and the impact of the ruling at this time unclear. The affected parties are not entirely sure which way nor how to proceed. The New York State Governor’s office itself is currently trying to assess how the decision will impact DFS moving forward.
Meanwhile, the great news for DFS players in the State of New York, is that all DFS companies, including FanDuel and DraftKings are free and perfectly legal to continue to accept players from the Empire State.
DraftKings and FanDuel are within their rights appeal the ruling and as yet, have not been ordered to cease trading in the state.
Why the Court Ruling Could be Irrelevant
The court ruling is operating in an environment which is now all but extinct. It simply doesn’t apply in a legal environment in which the U.S. Supreme Court in May 2018 overturned Federal opposition to sports betting, and that states have the constitutional right to legalize, sanction, and regulate sports betting if they want to do so.
More likely than to shut down DFS platforms in the 2019-2020 legislative session, the New York State Legislature may look at drafting wholesale laws and recommendations to include DFS in a collection of new legislative proposals for it and other lucrative revenue sports betting measures.
Time will tell, but in order to do so, the State Legislature will need to redefine DFS as gambling.
Stand by – we will update you as the decision comes to hand.