New York AG amends lawsuit against DraftKings and FanDuel

6 January 2016

New York Attorney General Eric Schneiderman has altered his lawsuit against DraftKings and FanDuel in a move that could see the daily fantasy sports (DFS) industry hit with approximately $3 billion (€2.8 billion) in fines.

In November, Schneiderman declared that DFS constitutes illegal gambling and ordered both DraftKings and FanDuel to stop taking bets from customers in the US state.

Despite the DFS companies claiming that they were operating within New York law, State Supreme Justice Manuel Mendez last month granted Schneiderman’s request for an injunction to block both companies from operating in New York, while also denying temporary retaining orders from the DFS brands.

DraftKings and FanDuel were granted a temporary stay in New York to January 4, after which the legal battle with Schneiderman recommenced.

Prior to the deadline, Schneiderman announced that he was to amend his lawsuit against the two companies in order to seek the return of all the buy-ins paid by customers who played in New York during 2015, in addition to a fine of $5,000 per head.

With approximately 600,000 people in the state currently playing DFS games, New York could seek a sum in the hundreds of millions of dollars for buy-ins, as well as approximately $3 billion in fines.

In the amendment, Schneiderman accused the websites of committing “repeated and persistent fraudulent acts,” highlighting first deposit bonuses as evidence of supposed malpractice.

Schneiderman also said that the sites misrepresent the chances and skill levels needed to win “life-changing” amounts of money in marketing and advertising.

In response, David Boies, a lawyer representing DraftKings, said in a statement that the amended complaint demonstrates that Schneiderman “still does not understand” the DFS market and his actions are based on a “fundamental misunderstanding of such competitions”.

Related articles:

DraftKings, FanDuel to remain in New York despite ruling

New York Attorney General declares DFS illegal gambling