DraftKings and FanDuel, the two most popular daily fantasy sports sites, filed lawsuits on Friday to stop New York Attorney General Eric Schneiderman from banning them in New York State.
Earlier this week, Schneiderman said that the two sites are illegal gambling and does not agree with the companies’ positions that daily fantasy is a game of skill, not chance. He also issued a cease-and-desist letter to both companies to immediately halt their business with New York residents.
“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,” Schneiderman said in a statement. “Today we have sent a clear message: not in New York, and not on my watch.”
Of course, the two companies - which are valued at $1 billion each and have numerous investors from the sports and media worlds - were not going to hold any punches. According to Bloomberg, the two companies have filed lawsuits against Schneiderman, accusing him of bullying them and abusing his powers. The sites also asked to continue operating in New York.
New York state is hope to 5 percent of FenDuel’s subscribers and 7 percent of DraftKings’, according to their filings.
ESPN reports that DraftKings’ filing said that Schneiderman “has unleashed an irresponsible, irrational and illegal campaign to destroy a legitimate industry.”
Schneiderman quickly issued a response today, insisting that both companies “are operating illegal sports betting websites under New York law, causing the same kinds of social and economic harms as other forms of illegal gambling.”
“As a result, our office issued a cease and desist letter to stop them from violating state law by accepting bets from people in New York,” the attorney general added. “Because both companies have refused to follow the law in our state, we will take action to enforce state law."
New York is not the only state with a microscope on FanDuel and DraftKings. USA Today reported earlier this month that Nevada has determined that the sites are gambling and cannot operate in the state without a license.