New York tells fantasy sports websites to stop taking bets in state

Tue Nov 10, 2015 8:07pm EST
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By Diane Bartz

WASHINGTON (Reuters) - The New York state attorney general on Tuesday ordered the fantasy sports sites DraftKings and FanDuel to stop accepting bets in New York, saying that the operations were essentially illegal gambling, according to copies of letters to the companies seen by Reuters.

DraftKings and FanDuel have been at the center of a firestorm of controversy since early October when a DraftKings employee won $350,000 from a $25 entry in an American football contest on the rival FanDuel site. The two companies then banned their employees from playing, but local and federal authorities began to investigate whether the fantasy sites offered games of chance, which were essentially gambling. [nL1N12J1S9]

The letters on Tuesday from the office of New York Attorney General Eric Schneiderman said that the fantasy sites were considered gambling because customers "are clearly placing bets on events outside of their control or influence, specifically on the real-game performance of professional athletes."

In the games, fans pay to compete for daily cash prizes in simulated athletic contests.

In the letters, the attorney general's office said it demanded that the companies "cease and desist from illegally accepting wagers in New York state." The letters were sent to both DraftKings and FanDuel and given to Reuters by a spokesman for Schneiderman.

The state of Nevada took a similar action in mid-October, with the Nevada Gaming Control Board saying the companies had to cease operations in the state.

'HASTY ACTION'   Continued...

Nigel Eccles, CEO & Co-founder of FanDuel speaks during an interview in New York, September 10, 2015. REUTERS/Brendan McDermid -