BREAKING: NY Attorney General says daily fantasy is gambling & illegal

[CHOPTALK]

I've never understood the skill/luck thing .
Dont know when people came to the conclusion that when something is skill it can't be gambling.
There is lots of gambling that involves skill.
When did something being skill exempt it from being gambling

 

[HacheMan]

I've never understood the skill/luck thing .
Dont know when people came to the conclusion that when something is skill it can't be gambling.
There is lots of gambling that involves skill.
When did something being skill exempt it from being gambling

It's easy.

All types of gambling, including DFS, require a combination of skill AND luck.

Both of them.

Obviously the percentages of both vary depending on the person.

But in almost all cases of gambling, except maybe poker & some casino games, Chance/Luck is the bigger factor.

In DFS, you may use your skill (knowledge) to build a roster & determine who to play, but in the end, chance/luck plays the biggest role.

Chance/Luck determines if your player stays healthy or gets injured.
Chance/Luck determines on how much the coach does or doesn't play your player.
Chance/Luck determines bad bounces & turnovers.
Chance/Luck determines if your team defense gets fumbles, or interceptions, or if your offensive players have a bigger or lesser day because of turnovers.
Chance/Luck determines if your player does or doesn't get pulled because they have a huge lead or losing badly.
Chance/Luck determines if your player is a late scratch just before game time because of an illness.
Chance/Luck determines if the coach calls more running or passing plays to affect your rb or wr's touches.
And on & on & on.

Chance/Luck determines virtually everything.

Besides, when you think about it, isn't "skill" something that comes more often physically, than mentally??

DFS companies' skill argument & actually getting away with it for so long is amazing & it took one little mistake for people/politicians to get educated on it enough to understand what's been going on & flying under the radar all this time.

But that doesn't mean people shouldn't be allowed to play if they want.

Free country huh....

 

[HacheMan]

The New York Attorney General And Daily Fantasy Sports: What Lawyers Are Saying



http://www.legalsportsreport.com/61...al&utm_source=twitter.com&utm_campaign=buffer

New York’s attorney general has issued cease-and-desist orders to FanDuel and DraftKings, saying that they “constitute illegal gambling” under state law. And that has led a number of attorneys to weigh in on the issue, through their own stories or via the media.
New York AG Eric Scheiderman sent letters to both DFS operators this week; you can read the text of the letter to DraftKings here and the text of the letter to FanDuel here.

The “material degree” of chance vs. game of skill issue

SI.com writer and lawyer Michael McCann tackled the AG’s letters to DraftKings and FanDuel at length. He doesn’t offer a conclusion one way or another about the merits of skill vs. chance, but does outline what’s in play.

As to Section 225.00, which I detail in a previous SI.com article, gaming contests are unlawful under New York law when chance is a “material” element. The word “material” is key: Even if DFS games are mostly about skill, they could still be considered unlawful under Section 225.00 if they involve a substantial or meaningful amount of chance. A court would ultimately need to make a determination on whether a “material” chance exists in FanDuel and DraftKings’ games.​

And later:

DraftKings and FanDuel are not without legal defenses. The companies have long insisted that their games are mainly about skill, and thus do not constitute unlawful gambling. Along those lines, the companies maintain that winners of DFS games tend to be those that conduct research and are skilled—rather than those who happen to be lucky.

​

Forbes contributor and lawyer Darren Heitner notes that the material element test is not an open-and-shut case either way, saying it’s a “softer standard” than employed in states where language is different. He also says sites need to prove the skill element:

Now is the time for the daily fantasy sports industry, and in particular DraftKings and FanDuel, to demonstrate that chance is not a material element to the winning of competitions and that skill is key.

​

Daniel Wallach, an attorney who closely follows the DFS industry, believes the “material degree” test can be met, that chance plays a role in the outcome of DFS contests, according to a story by Bloomberg:

“These are not chess pieces that you can control,” he said. “In fantasy sports, once the lineups are set, your role concludes.”

​

Dan Eaton, attorney and ethics professor at San Diego State University, wrote a piece for CNBC, in which he was bearish on the odds of the NY AG winning a legal battle with the daily fantasy sports industry. Almost the entire article deals with how much skill he perceives to be involved in DFS.

But fantasy football isn’t like placing a bet on a roulette wheel or buying a lottery ticket or even betting on one established team against another in a scheduled game. The “fantasy” element is in the customer carefully selecting players at key positions to comprise a fantasy,that is hypothetical, team subject to a salary cap that then goes on to compete against other “fantasy” teams selected with similar deliberation.
​

Jeff Ifrah, a lawyer who represents some DFS operators, offered what the legal argument might be for FanDuel and DraftKings:

“First, you argue that there is no foundation for the conclusions that are reached (by the attorney general). There is no scientific study, he did not engage any expert analysis … and then I would just be prepared to argue, as a secondary matter, that it’s a game of skill.”

​

Few winners, but still gambling?

Lawyers and non-lawyers alike have taken issue with Schneiderman calling DFS gambling, but also saying this (from a press release):

In addition, the investigation found that both companies consistently use deceptive advertising to lure consumers into an unregulated online gambling operation that, while marketed as a game that anyone can win, in fact distributes the vast majority of winnings to a small subset of experienced, highly sophisticated players. These winners constitute roughly 1% of all players on the two sites. The AG’s investigation also revealed that both companies deliberately target demographics susceptible to problem gambling
.
​

Heitner sees hypocrisy and a hole in the AG’s argument that DFS operators are running gambling sites:

It appears that Schneiderman is mounting a defense against his own position. If a small minority of experienced, highly sophisticated players are winning guaranteed prize pools, then it should lead to the conclusion that skill heavily dominates over chance.
​

Eaton agreed with that assessment in his piece, without directly mentioning the AG’s assertion.

Intersection of NY law with federal law

No matter what you think about the legal arguments about DFS operators allegedly breaking the law in New York, per the AG’s assertions, this much is clear: If there is a violation of New York law, it could mean trouble at the federal level. Here is Wallach on that topic:

“The risk for the industry is that a violation of New York law, if it stands, could potentially give rise to federal prosecution,” said Daniel Wallach, sports and gaming attorney with Becker & Poliakoff law firm in Fort Lauderdale, Florida. “A state law violation really eases the path for federal prosecutors.”

​

McCann concurs, saying that a NY law violation would “increase the odds that federal indictments are brought.”
What’s next?

McCann goes into detail on what we could see in the coming days; FanDuel and DraftKings have five days to respond to his cease-and-desist notice. He said that the companies could file for an injunction against Schneiderman’s order. A lawsuit from the AG’s office against FanDuel and DraftKings also appears likely, per McCann.
Ifrah offered this:

On top of that “(Schneiderman) would have to go to court to enforce violations of the order. It is not self-enforcing.”
​

Heitner said a lawsuit from the AG’s office and a request for an injunction from the operators are possibilities.

Impact on other states?

McCann notes that several other states have similar gaming laws to New York, pointing out New Jersey and Nebraska and noting that AG’s in those states and others could piggyback onSchneiderman’s findings.

 

[PatsFan1283]

The NY Post says they have sources with the DOJ that say they're going to rule that DFS is gambling before the year is over. I dunno what the result of that would be, but I'd imagine it would put the industry in quite the bind. Post also saying the NFL isn't really doing anything in Washington for DFS as it relates to lobbying.

Rally outside the AGs office at 8AM.

http://nypost.com/2015/11/12/nfl-team-owners-draftkings-stakes-in-danger/

 

[BostonBettor]

Typical NFL - I wouldn't be surprised if they force the owners to divest from DK and/or FD. If the DOJ declares dfs as illegal gambling, then the industry would appear to be toast. If it's left to the states, I can see it existing on a much smaller scale. The fact that these companies were so caught of guard by the NY AG's ruling indicates to me how unconnected they are. I don't see them being able to over turn this in court.

 

[Betallsports]

Typical NFL - I wouldn't be surprised if they force the owners to divest from DK and/or FD. If the DOJ declares dfs as illegal gambling, then the industry would appear to be toast. If it's left to the states, I can see it existing on a much smaller scale. The fact that these companies were so caught of guard by the NY AG's ruling indicates to me how unconnected they are. I don't see them being able to over turn this in court.

They had to see the 'Writing on the Wall" Nevada said 2 weeks ago, it's gambling, Go get a Lic.
and they ( Draft kings and fanDual ) packed up their Bags and went Home ...

At the same time there were, what .. 20 States looking into them, half before the Nevada beat down ..

They just probably thought with the backing they have with the NBA & NHL, and investments from some Big name.. they were untouchable ...

 

[Willye]

They just added ****** to draft kings for deposits interesting

 

[HacheMan]

They had to see the 'Writing on the Wall" Nevada said 2 weeks ago, it's gambling, Go get a Lic.
and they ( Draft kings and fanDual ) packed up their Bags and went Home ...

At the same time there were, what .. 20 States looking into them, half before the Nevada beat down ..

They just probably thought with the backing they have with the NBA & NHL, and investments from some Big name.. they were untouchable ...

Yes this is all accurate.

When discussing the baffling sarcastic comments by DraftKings & Fanduel towards different important people who could help in determining their fate, ESPN's David Purdum (great follow by the way) told me on Twitter that he agrees, but it must be tough being them right now being under fire.

But you have to be smart in their situation & so far i think they have made some horrible decisions in helping the future of their businesses...

 

[The Guesser]

John Oliver Last Week Tonight doing an effective takedown of the hypocrisy of Draft Kings and Fanduel claiming they aren't gambling.

 

[PatsFan1283]

John Oliver Last Week Tonight doing an effective takedown of the hypocrisy of Draft Kings and Fanduel claiming they aren't gambling.

lol just watched it.

Trevor Noah did a segment like a month ago that was good too.

 

[yisman]

Schneiderman is a crook

he takes money from New York casinos and racetracks and then comes out saying he's trying to protect the public from gambling

go shut down Aqueduct, Belmont, and Finger Lakes, you scumbag

 

[WorldNumberOne]

They stopped taking paid entries at 2:30 pm in NYC

 

[The Guesser]

[h=1]NY Attorney General Adds Yahoo To FanDuel & DraftKings Investigation, Preliminary Hearing Next Week[/h] Posted <time datetime="2015-11-17" class="timestamp">5 hours ago</time> by Fitz Tepper (@fitztepper)


Another day, another development in the wild world of daily fantasy sports.
While DraftKings and FanDuel await their day in court next Wednesday, the NY Times has reported that Eric T. Schneiderman, NY’s Attorney General, has decided to include Yahoo in his investigation into the daily fantasy sports.
Wait…Yahoo?
Yep. While Yahoo has avoided the flashy prime-time ads that are now common in the industry, the site actually added daily fantasy sports to its fantasy offerings in July, and since then has become the third largest DFS provider after FanDuel and DraftKings.
In fact, Yahoo has actually offered year-long fantasy leagues with cash prizes since before DraftKings and FanDuel were even founded. Presumably, Yahoo’s DFS offerings would legally be considered identical to their legacy year-long cash leagues, as success in both cases are at least partially contingent upon factors outside of user’s control.
So now that Yahoo’s cover is blown, what comes next for the daily fantasy sports triumvirate?
While a New York Supreme Court Judge yesterday denied the temporary restraining order requested by DraftKings and FanDuel so they could continue to operate in the state, an expedited hearing was scheduled for next Wednesday, November 25th.

Each company seems to be handling the situation differently as they wait for their day in court.
Although Yahoo hasn’t yet officially been named as part of an investigation by NY’s Attorney General, the company is clear on its website that Yahoo Daily Fantasy Sports is legal, at least outside of the 7 states which have already said that DFS violates state law. The site has so far taken no steps to restrict players in New York.
FanDuel, which is based in NYC, today temporarily stopped accepting contest entries from NY residents. However, the company said they believe that the New York Supreme court will give an update on the situation next week, and hopes to soon resume offering paid contests to New Yorkers.
On the other hand, DraftKings, based in Boston, is continuing to operate in NY despite being denied a temporary restraining order which would have allowed them to legally continue operations in the state. The company issued a statement this morning saying that they “look forward to being afforded a full and fair opportunity to demonstrate why daily fantasy sports are legal under New York State law”.
And what is Eric T. Schneiderman, NY’s Attorney General doing about this? This morning his office filed an injunction against DraftKings and FanDuel, essentially asking a judge to force the companies to cease-and-desist while they await trial.
To be sure, there is one thing all parties can agree on, which is that next Wednesday can’t come soon enough.

 

[PatsFan1283]

I've never understood the skill/luck thing .
Dont know when people came to the conclusion that when something is skill it can't be gambling.
There is lots of gambling that involves skill.
When did something being skill exempt it from being gambling

The only reason that matters is because of the UIGEA carve-out. The carve-out says DFS is a skill game and not gambling. It's just legal terminology BS.

DFS is technically legal under federal law right now. Sure it is based on a loophole that nobody saw coming but it is legal. The sites are just falling back on that because it is the only card they have to play.

Obviously if online skill-based gaming wasn't frowned upon in this country by the US Gov't then poker would just be legal already.

Even if they win in NY court, I think the feds will just get them eventually.

 

[The Guesser]

[h=1]FanDuel and DraftKings embrace 'gambling' designation in UK as they fight label in US[/h] By: Philip Marcelo, The Associated Press
Sunday, Nov. 15, 2015 at 7:12 AM

BOSTON - Top daily fantasy sports companies are fiercely rejecting the idea that their rapidly growing industry should be considered gambling in the United States.

But FanDuel and DraftKings are OK with that label in the United Kingdom. They're embracing it as a step toward global expansion.

U.K. gambling regulators granted a gambling license to DraftKings in August, while FanDuel applied earlier this month for a license as a "gambling software" company.
Jeffrey Haas, chief international officer for DraftKings, maintains there's no contradiction. DraftKings is simply approaching each jurisdiction case by case, he said.
"Our product is a game of skill. In order to be successful, you need to apply your skill in order to have the best lineups to go into our contests to win," Haas said. "Nevertheless, our games of skill are looked at differently by regulators in different jurisdictions around the world."
But with the gambling debate heating up at home, some in the fantasy sports industry say the international moves put the two companies in an increasingly untenable position.
"It's pretty naive to go get gambling licenses in the U.K. and expect people to believe you're not gambling," said Shergul Arshad, founder of Mondogoal, a U.K.-based daily fantasy sports startup focused on professional soccer that would likely compete with DraftKings and FanDuel.

"You can't come to a state that bans you and say it's not gambling and then have a U.K. gaming license," he said. "It's hypocrisy."

Haas said DraftKings plans to offer its familiar range of NFL, NBA, Major League Baseball and NHL contests in the U.K. but with a special emphasis on professional soccer, including the English Premier League, North America's Major League Soccer and Europe's Champions League.
DraftKings and FanDuel say they support developing U.S. regulations for their industry, which grew out of traditional, season-long fantasy sports games played by millions of Americans. They just don't want regulations as restrictive as those imposed on casino gambling.
Many U.S. states use a chance versus skill argument to help define gambling. In daily fantasy sports, players compete for cash prizes online by assembling teams of individual athletes to rack up "fantasy" points based on how those athletes perform in real-world games.
New York's attorney general is the latest to challenge daily fantasy, declaring the contests amount to illegal sports betting in his state. He ordered DraftKings and FanDuel to stop accepting in-state bets. DraftKings and FanDuel promptly asked the state Supreme Court to nullify the order and declare the games legal.
The international push for daily fantasy sports has been in the cards long before the latest scrutiny in the United States.
Haas said DraftKings will have all the required gambling protections called for in U.K. law, including age verification of gamblers and "self-exclusion" technology that allows those who are addicted to gambling to voluntarily block themselves from contests.
"We're on track," said Haas, who is based in London. "We want to be the biggest and best daily fantasy sports operator in the world."
The expansion is a risk for the companies, which still aren't profitable despite millions in investor funds.
Unlike in the United States, where sports betting is legal only in a handful of states, daily fantasy sports will have to compete with a well-established, lucrative sports betting industry internationally, industry watchers note.
And the furor at home is already forcing a financial retrenchment of sorts by the companies, which may siphon energy and resources from global expansion efforts, they say.
FanDuel declined to discuss the company's international plans, stressing its U.K. application is the first step in a lengthy review. But Haas, of DraftKings, argues the increased scrutiny at home makes international expansion all the more critical to his company's outlook.
"In the U.K., we have an opportunity to work in a perfectly clear regulatory environment where we understand what the rules are, the tax rates are and the sustainability of the business will be," he said. "And as we look to expand internationally, it's an opportunity to expand the footprint of the business in a very different way."

 

[PatsFan1283]

If the sites cameout and said they were gambling then they wouldn't exist.

Their strategy from the start was pretty clear.

Rollout DFS, grow it, then by the time it grows just hope that you have so much momentum behind you with special interests and fan interest that it will be tough for the Gov't to ban. If you're right, you got an 11 figure industry in a few years where 2 participants have 95% of the market. If you're wrong, then you go do something else.

Pretty smart "skill based" gamble.

 

[The Guesser]

If the sites cameout and said they were gambling then they wouldn't exist.

Their strategy from the start was pretty clear.

Rollout DFS, grow it, then by the time it grows just hope that you have so much momentum behind you with special interests and fan interest that it will be tough for the Gov't to ban. If you're right, you got an 11 figure industry in a few years where 2 participants have 95% of the market. If you're wrong, then you go do something else.

Pretty smart "skill based" gamble.

Time to switch their initial strategy, if they want to continue existing, and ultimately thriving in the US. Embrace that they are gambling, since they actually are gambling, fight to change the hypocritical laws that ban sports gambling in the US. Won't happen immediately, but will happen eventually. Might as well be at the forefront. Or just exist as foreign entities, serving foreign markets. The choice is pretty clear. :think2:

 

[PatsFan1283]

Time to switch their initial strategy, if they want to continue existing, and ultimately thriving in the US. Embrace that they are gambling, since they actually are gambling, fight to change the hypocritical laws that ban sports gambling in the US. Won't happen immediately, but will happen eventually. Might as well be at the forefront. Or just exist as foreign entities, serving foreign markets. The choice is pretty clear. :think2:

Is it? They're better off just hoping the leagues/big media/fan support is enough that politicians back off under the guise of the "skill game" argument. Yeah it's flimsy but if they comeout and say "Yeah, we're gambling like sports betting and poker and we all should be legal" then they're gonna get crushed.

These states aren't gonna legalize online sports betting or poker. Yeah maybe NJ will, maybe PA, few others get ambitious but it will be a little while before it is legal nationwide. To just have everyone betting games on their phones would be a pretty big paradigm shift for society and a big reversal in policy, I'm skeptical it is around the corner. Why would the sites wanna attach themselves to that train?

Just because people like Adam Silver want sports betting legal doesn't mean that states do.

 

[The Guesser]

Is it? They're better off just hoping the leagues/big media/fan support is enough that politicians back off under the guise of the "skill game" argument. Yeah it's flimsy but if they comeout and say "Yeah, we're gambling like sports betting and poker and we all should be legal" then they're gonna get crushed.

These states aren't gonna legalize online sports betting or poker. Yeah maybe NJ will, maybe PA, few others get ambitious but it will be a little while before it is legal nationwide. To just have everyone betting games on their phones would be a pretty big paradigm shift for society and a big reversal in policy, I'm skeptical it is around the corner. Why would the sites wanna attach themselves to that train?

Just because people like Adam Silver want sports betting legal doesn't mean that states do.

Several states do and would quickly pursue it when/if NJ gets it.
What do you think FD and DK's strategy will be when they lose the NY case, as is highly likely, and most states jump on the NY bandwagon and ban them? I agree it'll look bad for them to suddenly shift to embrace the fact that they are gambling, and fight the sports betting laws, but what choice do they have, to continue existing in the US on a large scale? When a layman like John Oliver so clearly lays out the case that they are gambling, they'll have little chance to keep up the charade.

 

[PatsFan1283]

Several states do and would quickly pursue it when/if NJ gets it.
What do you think FD and DK's strategy will be when they lose the NY case, as is highly likely, and most states jump on the NY bandwagon and ban them? I agree it'll look bad for them to suddenly shift to embrace the fact that they are gambling, and fight the sports betting laws, but what choice do they have, to continue existing in the US on a large scale? When a layman like John Oliver so clearly lays out the case that they are gambling, they'll have little chance to keep up the charade.

I think the feds are going to probably stick it to them eventually regardless of what happens in NY. Who knows when, but anyone who goes on the site and sees people tossing 10k games around like it is nothing is going to quickly have a "holy shit this is legal?" moment. Just like every consumer did when they first found out the site was legal.

If that happened then they probably do what pokerstars does. Operate overseas and keep tabs, lobby in the US hoping that one day there is a better legal environment for them to comeback.

Long-term (tough to put a year on this) TV is dying. Nobody is watching commercials anymore unless it is during sporting events and the entertainment landscape is so competitive that there will likely be a push to just legalize everything eventually. Who knows when that is though, if you asked me when it would be 10 years ago, I would've said right now.

It is a little bizarre because how do you rule DFS is illegal but season long fantasy isn't? You really can't. So I could even see the sites that offer season long $ prizes like the NFFC being screwed.