New York attorney general: DFS sites can't accept bets from state residents

New York’s attorney general has determined daily fantasy sites such as DraftKings and FanDuel qualify as illegal gambling and has ordered them to stop accepting bets from residents of the state.

New York’s attorney general has determined daily fantasy sites such as DraftKings and FanDuel qualify as illegal gambling and has ordered them to stop accepting bets from residents of the state. 

New York‘s decision comes four weeks after Nevada’s Gaming Control Board ordered such sites to stop operating in the state. 

Daily fantasy sites have previously been allowed to operate due to an exception in the Unlawful Internet Gambling Enforcement Act of 2006 for online games of skill. But the industry has come under increased scrutiny since sites like DraftKings and FanDuel began an aggressive advertising blitz at the start of the NFL season.

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According to Bloomberg, the vast majority of daily fantasy prizes are won by high-rollers that enter an average of 330 lineups per day. 

“It is clear that DraftKings and FanDuel are the leaders of a massive, multibillion-dollar scheme intended to evade the law and fleece sports fans across the country,” attorney general Eric Schneiderman said Tuesday, according to The New York Times, “Today we have sent a clear message: not in New York, and not on my watch.”

FanDuel and DraftKings both issued statements about the ruling.

And here's what DraftKings has to say about that... pic.twitter.com/vR5PUYK7yi

— Jon Campbell (@JonCampbellNY) November 10, 2015

DraftKings also says it will dispute Schneiderman’s ruling.

DraftKings tells me it is not leaving the New York market and plans to fight today's ruling by the attorney general.

— David Payne Purdum (@DavidPurdum) November 11, 2015

Last month, the Times reported that daily fantasy employees had taken advantage of insider information to win large jackpots on rival sites, including one DraftKings employee who won $350,000 from a $25 bet on FanDuel. Both sites issued a joint statement saying there was no evidence their employees had taken advantage of privileged information but later permanently barred their employees from participating in daily fantasy contests.

- Dan Gartland