FanDuel and DraftKings yesterday "agreed to shut down" in New York as part of a settlement with the office of state Attorney General Eric Schneiderman, according to Sharon Terlep of the WALL STREET JOURNAL. New York is "their largest market." The deal comes amid an effort by the AG to "force the companies to stop accepting money from New Yorkers and pay restitution to contestants who lost money playing on the sites." The sites could "reopen" if state lawmakers "expressly legalize daily fantasy sports contests." Otherwise, paid DFS contests will "remain closed to New Yorkers until an appeals hearing in September." FanDuel in a statement called the situation "disheartening" (WALL STREET JOURNAL, 3/22). ESPN.com's David Purdum notes Schneiderman "will wait until an appeals hearing is held in September to pursue underlying litigation." If successful, the litigation "would force DraftKings and FanDuel to pay restitution to participants who lost money." No specific date for the hearing "has been announced," and it "may not take place" if the state legalizes DFS. Several DFS bills "have been introduced" in the state legislature, which runs until the middle of June. State Rep. Dean Murray: "It's up to the legislature right now. We can fix this immediately, and I think we can do it" (ESPN.com, 3/21).
WAITING IT OUT: In N.Y., Glenn Blain notes the deal is "intended to give the state Legislature time to pass legislation that would allow the sites to operate legally with oversight from the state." Schneiderman: "The law has to be changed if they're going to operate. We'll see what happens in Albany, and if it's not changed, under this agreement, we're back in court." Schneiderman "confirmed" that Yahoo also was "included in his investigation." Schneiderman said that he is "optimistic" Yahoo and other DFS sites also will "stop doing business" (N.Y. DAILY NEWS, 3/22). Also in N.Y., Joe Drape notes both companies "acknowledged that the loss" of the N.Y. market "was significant and that they were committed to finding a legislative solution" (N.Y. TIMES, 3/22). SI.com's McCann & Green noted New York is the 13th state in which "paid DFS is either not offered by operators or has come under significant legal questioning." That marks "a significant change from before the start of Schneiderman's investigation" at the beginning of October, when all but five states allowed paid DFS contests. The agreement also "signaled the operators' increasing confidence at the state legislative level" (SI.com, 3/21).
FINDING A LOOPHOLE: In N.Y., Evan Grossman notes bettors were "still able to play DFS on Yahoo's site" after Schneiderman's settlement with DraftKings and FanDuel. Yahoo is "operating in a loophole and was still free to peddle" DFS games. The highest entry fee yesterday was "$1,050 for a chance at $3,000 in a three-team NBA group." The largest group purse on Yahoo "was a piece of $10,000 in a massive contest that was trying to fill more than 2,000 players" (N.Y. DAILY NEWS, 3/22). Yahoo Sports Head of Product Michael La Guardia said that the company was "watching developments closely and considering options." La Guardia: "We believe we're acting inside of the law across the board here and we'll always make sure that we do so" (REUTERS, 3/21).
