Categories: Daily FantasyIndustry

New York Judge: Fantasy Sports Betting Is Unconstitutional

Albany Supreme Court Justice Gerald Connolly released his ruling this week and sided with anti-gambling activists that the law which permits fantasy sports betting online is in violation of the state constitution.

He declared the compromise measure from 2016 to be “null and void.” All hope is not lost, however. The judge went on to say that state legislators have the authority to decriminalize DFS betting and that “any finding of unconstitutionality in such context would be beyond the scope of the judicial review authority.”

FanDuel and DraftKings

In 2015, NY’s Attorney General Eric Schneiderman sued the fantasy sports operators for misconduct. He said the sites were basically illegal gambling operations and should be shut down. He sent cease-and-desist letters to the companies at the same time and eventually was successful in forcing the sites out of New York in late spring 2016.

Daily Fantasy Sports in NY

Governor Cuomo legalized the DFS sports bill, S 8153, in New York in August 2016. After months of battles between the companies that host the competitions and state officials, Cuomo’s signing of the bill exempts daily fantasy sports betting from state gambling law, which effectively re-instated FanDuel and DraftKing’s ability to operate in the state.

Schneiderman didn’t drop his suit since it claimed FanDuel and DraftKings committed false advertising and consumer fraud in addition to operating illegally under the state’s constitution, but he agreed that the bill settled the argument that the games should be considered illegal gambling.

The bill labeled the activities as games of chance. Since then, anyone 18 or older can legally place bets as long as they aren’t on high school and college sports.

The Lawsuit at the Center of it All

Four New York residents filed a lawsuit against Governor Cuomo and the New York State Gambling Commission in October 2016 in Supreme court in Albany, saying the new law was “unconstitutional” and demanding the decision to be made by voters through a referendum. Neil Murray, a lawyer who filed the suit, made the following comments about it:

“The plaintiffs seek to protect the public from predatory gambling consistent with the constitution. They also intend to stop FanDuel, DraftKings and other internet gambling operators from exploiting the financially desperate and the addicted in New York.”

The four plaintiffs, Anne Remington, Katherine West, Charlotte Wellins, and Jennifer White say that DFS should be considered illegal gambling because there is an element of chance. Each of the plaintiffs has been affected by gambling addictions, either personally or through a family member. The 77-page lawsuit says,

“Their heartbreaking stories include a litany of suffering marked by child neglect, bankruptcy, divorce, loss of homes and the agony of rehabilitation and relapse, all directly caused and threatened to continue to be caused by [daily fantasy sports] gambling.”

Robb Smith, who is executive director of the public policy group called Interfaith Impact of New York State, supports the lawsuit. In an article by ESPN, Smith shared his opinion on the matter:

“The legislature legalized internet gambling in every home, every dorm room, every place of employment and on every smartphone in New York.”

What Happens Next?

Attorney Neil Murray says he’s going to wait and see what the state does with the decision before taking any steps against Governor Cuomo and the Gaming Commission to force them to enforce the judge’s ruling.

Naturally, FanDuel and DraftKings will remain in the state. David Boies, who is lawyer for DraftKings, said the company “can continue to offer their services to players. We are continuing to study the court’s decision invalidating the regulatory structure and are committed to working with the legislature.”

A spokesperson for Governor Cuomo said the office is reviewing the ruling.

Rick Rockwell

As a longtime freelance writer, avid sports fan, former athlete, and experienced sports bettor, Rick Rockwell has risen up the ranks at GamblingSites.org to become the self-professed "King of the Blog" in his first year with the site.

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