DraftKings launches appeal against NY injunction

24 February 2016

DraftKings cited horse racing and spelling bees as it appealed the preliminary injunction imposed against daily fantasy sports (DFS) operators in New York.

The court that sided with state Attorney General Eric Schneiderman in his battle to ban DFS operators “abused its discretion” and committed several errors of law when it imposed the injunction in December, DraftKings argued in an appeal filed this week.

The company claims that a preliminary injunction banning ban DraftKings and FanDuel in New York should be thrown out because Schneiderman “did not come close to carrying the burden” of proving that the law is on his side.

“The court applied the wrong legal standard, and ignored the undisputed evidence, in finding that daily fantasy sports contests are games of chance,” the company argued in its filing.

Judge Manuel Mendez was persuaded to impose the injunction after Schneiderman’s office suggested that “a small number of professional gamblers profit at the expense of casual players”.

However, DraftKings noted that this assertion proves fantasy sports is not gambling, since those with greater skill are able to do better.

The 67-page filing draws parallels between the skill of the fantasy sports player and the horse owner who “competes based on the performance of his horse”.

It claims that it merely collects entry fees, rather than gambling stakes, and suggests that a host of other tournaments where random factors can make the outcomes unpredictable, such as dog shows and spelling bees, would be “criminalised” under Judge Mendez’s ruling.

"Daily fantasy sports are skill-based games that are, and should be, legal," attorney David Boies said in a statement. "DraftKings contests are no less legal than season-long fantasy sports, which the Attorney General has repeatedly conceded are legal."

Related article: DraftKings, FanDuel to remain in New York despite ruling