Daily fantasy sports site FanDuel stops taking money in NY

Fri Nov 13, 2015 9:47pm EST
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By Liana B. Baker and Suzanne Barlyn

NEW YORK (Reuters) - Daily fantasy sports site FanDuel said on Friday it stopped taking new deposits in New York after the state's attorney general declared the games to be illegal gambling.

New York Attorney General Eric Schneiderman sent cease and desist letters this week to daily fantasy sports market leaders FanDuel and DraftKings, demanding that they stop taking money from players in the state.

Both companies filed lawsuits in state court on Friday, contesting the order and asking the court to rule the games are legal.

FanDuel stopped taking new money from New Yorkers, but said players who deposited money previously could play in this weekend's contests. It said users in New York could also continue to withdraw from their accounts.

On Tuesday, the state attorney general's office declared the games against state law because customers "are clearly placing bets on events outside of their control or influence, specifically on the real-game performance of professional athletes."

DraftKings said in its lawsuit that Schneiderman was "using strong-arm tactics and defying the rule of law." DraftKings plans to continue taking money in New York during the five business days Schneiderman allowed for a response to his order, Chief Executive Officer Jason Robins said in New York on Friday.

“DraftKings will continue to operate in New York while we pursue all legal options available to prevent the New York Attorney General from denying our customers their right to play the games they love,” a company representative said in a statement.

New York has more daily fantasy sports players than any other U.S. state, according to Eilers Research, so being forced to shut down there could cripple the fast-growing, multibillion-dollar industry.   Continued...

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