Daily fantasy players in New York received some disturbing news this afternoon. New York State Attorney General Eric Schneiderman issued a cease-and-desist order to FanDuel and DraftKings ordering both companies to stop doing business in New York after determining that daily fantasy sports contests constitute illegal gambling under state law.

The order included this little bit from Mr. Schneiderman:

Our investigation has found that, unlike 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. 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.

What’s not clear is who he’s taking a stand against, exactly. To date, not a single report has surfaced of a FanDuel or DraftKings customer being forced to play online at gunpoint. My general understanding as a DFS writer has so far been that all interactions between DFS sites and customers are voluntary. Needless to say, the people over at the RotoGrinders forums are not too happy about the news.

DraftKings alone has 500,000 customers from New York while FanDuel likely has just as many of its own NYers. This is a major blow to DFS not just because of the number of players from the state, but also because other states often follow the example set by New York’s attorney general. We should also keep in mind that FanDuel is headquartered in New York City.

Other states with active investigations are likely to follow suit.

According to the New York Times, the order applies specifically to FanDuel and DraftKings contests. Other DFS sites and season-long leagues are apparently in the clear… for now. In either case, the news sets a frightening precedent for any operator that currently accepts signups from New York.

FanDuel and DraftKings both responded with statements today.

From FanDuel:

Fantasy sports is a game of skill and legal under New York State law. 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, coworkers and players across the country. The game has been played — legally — in New York for years and years, but after the Attorney General realized he could now get himself some press coverage, he decided a game that has been around for a long, long time is suddenly now not legal. We have operated openly and lawfully in New York for several years. The only thing that changed today is the Attorney General’s mind.

From DraftKings:

We are very disappointed that New York Attorney General Eric Schneiderman took such hasty action today, particularly since he did not take any time to understand our business or why daily fantasy sports are clearly a game of skill. We strongly disagree with the reasoning in his opinion and will examine and vigorously pursue all legal options available to ensure our over half a million customers in New York State can continue to play the fantasy sports games they love.

It sure is comforting to know that while New York is in the midst of an alarming spike in murders, the state’s top law enforcement official spends his time on the important issues… like preening on about climate change, fussing over micro beads in personal grooming products and banning toy guns. What’s a few more dead bodies when you can make sure people don’t use the wrong face wash or draft Eli Manning for Sunday’s game against the Patriots?

No vote. No discussion. The big guys in New York don’t like daily fantasy sports and that means you can’t play either. Well, here’s one for yet another business being chased out of New York City. Let’s hope Eric Schneiderman can keep fighting the good fight in the issues that really matter to New Yorkers.

Bravo, Eric Schneiderman.

Give Them Your Two Cents

RotoGrinders admins kindly put together a list of resources for anyone wishing to voice an opinion on Attorney General Eric Schneiderman’s decision. Here’s where you can send your thoughts:

Snail Mail:

Office of the Attorney General

The Capitol

Albany, NY 12224-0341

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