Fantasy sports sites allowed to operate in New York during appeal

Mon Jan 11, 2016 4:36pm EST
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By Suzanne Barlyn and John McCrank

NEW YORK (Reuters) - Leading daily fantasy sports companies FanDuel and DraftKings will be allowed to keep operating in New York while they battle the state's attorney general, who wants them shut down there, an appeals court confirmed on Monday.

The move allows the companies to keep operating during an appeal of a civil action initiated by New York Attorney General Eric Schneiderman in November, a potentially extensive process.

The temporary stay of an injunction granted by a New York state trial court on Dec. 11 was extended on Friday by a panel of New York State Appeals Court judges.

The court will hear the appeal in May, but it is not known when the case will be decided.

"Daily fantasy sports are entirely legal, as they have been recognized to be over the past seven or eight years," said David Boies, a DraftKings attorney, in an interview.

In fantasy sports, contestants build a roster of players from real-life pro sports teams and accumulate points based on how those players perform in actual games. Backers of the games argue they are skilled-based entertainment products, not wagering.

But critics say the daily versions allow fans to spend money on the games with a frequency akin to sports betting.

"DraftKings and FanDuel are indeed operating illegal gambling operations in New York and should be permanently barred from doing business in New York," Damien LaVera, a spokesman for Schneiderman, said in a statement.   Continued...

A FanDuel logo is displayed on a board inside of the DFS Players Conference in New York November 13, 2015. REUTERS/Lucas Jackson