The Nanny Always Wins: Daily Fantasy Sports Stop Operations in New York

DraftKings, FanDuel hoping for legislation to give them permission to exist.

DraftKings

Thousands—perhaps tens of thousands—of New Yorkers have been saved from the terrible possibility of enjoyment and/or failure (and winning or losing money) playing daily fantasy league sports. DraftKings and FanDuel have agreed today to immediately stop allowing New Yorkers to join their paid fantasy sports league contests.

The "exchange" for agreeing to stop while New York Attorney General Eric Schneiderman goes after the legality of their businesses is that Schneiderman will wait until after the two companies appeal before trying to force them to pay back the money New Yorkers lost participating in the programs.

According to ESPN, it's not just about letting the two fantasy sports juggernauts fight the legal threat. There is a possibility of a legislative remedy:

No specific date for the September hearing has been announced, and it may not take place if the state legalizes daily fantasy sports during this legislative session. Several daily fantasy bills have been introduced in the New York legislature, which runs until the middle of June.

Nevertheless, pulling out of New York, even temporarily, is likely going to be a huge financial hit for the two companies. New York is the second-highest source of revenue for the daily fantasy sports companies, behind California. There are fights right now in Texas and Illinois (both states with obvious high revenue potentials) over the legality of fantasy sports.

Jim Pagels explored the legal fight over whether consumers have the right to participate in these fantasy leagues and the huge amounts of money involved in Reason's January issue. And watch ReasonTV below for more about the conflicts involved:

Comments

[esteve7]

"Yeah I hate Fanduel and Draft Kings"

"Then don't use them"

"Uhhh.... Uhhhhhhh"

/Fuck Off, Slaver

[Ted S.]

People who don't like the idea of fantasy sports wagering are using the state to bully those who do like fantasy sports wagering.

It's funny how bullying suddenly, magically becomes virtuous when it's the state doing it.

[SparktheRevolt]

Eric Schneiderman is the queen nanny. Shakedown artist in a suit that is the epitome of busy body.

[SparktheRevolt]

Eric Schneiderman is the queen nanny. Shakedown artist in a suit that is the epitome of busy body.

[Chipper Morning Wood]

This is yet another example of egregious government inefficiency. Ban big soft drinks, ban MMA, ban fantasy football. Think of all the wasted resources doing this piecemeal. Think of how much money the taxpayers would save if New York would just economize their effort and ban fun. Make it the state motto: New York - Where Fun Is None

[Cute Little Bunny Rabbit]

State motto: We put the "FUN" in "FU New York."

[Crusty Juggler]

I finally feel safe.

[Reactionary Moment]

Now that this evil gambling has been stopped, the state can go after the much bigger evil gambling cartel known as the NY Lottery.

[Winston]

How's that social liberalism going?

[SugarFree]

Did your anal gonorrhea finally clear up? jesse told you rough trade at truck stops was going to get you in trouble.

[Winston]

So any evidence that the "social liberals/tolerant" people Gillespie talks about actually want the government to leave people alone rather than just not liking SoCons?

[SugarFree]

So it's still bothering you? Just keep using the cream.

[Hyperion]

When I was like 4 years old, I remember this big scary 6 year old looking at me with a maniacal grin and speaking the words 'There is no Santa Claus'. I can easily get a visual image of him now saying instead 'There are no liberals'.

[Agammamon]

Ok, so . . . . what the hell are you talking about?

[Winston]

Gillespie talks about how everyone is socially liberal yet the government is still interfering with people's social lives....

[Hugh Akston]

First they came for the fantasy sports gamblers, and I said nothing because those guys are really kind of lame...

[Crusty Juggler]

It's a game of skill, Hugh!

[Los Doyers]

AUTODRAFT FTW

[Hyperion]

Libertarian moment! Someone had to say it.

[Ken Shultz]

FanDuel failed to protect its own brand.

Whether adults should be free to do what they want is a separate question, and screw the state of New York for this and every other paternalistic thing they do.

But FanDuel also failed to protect its own brand, and that gave the government a much wider opening than they would have had. Also, the political repercussions to this government stupidity would have been much greater if FanDuel hadn't failed to protect its brand.

[Los Doyers]

Whether adults should be free to do what they want is a separate question,

Is it? Because adults should absolutely be free to do what they want, provided they're not infringing on the rights of others. No question.

[Ken Shultz]

FanDuel very well may have been infringing on the rights of its customers through fraud (false advertising) and knowing that their employees or DraftKings employees were using inside information to beat customers.

Again, people can go get an attorney and sue FanDuel if they think their rights were violated. No need for the government to prohibit any competitor that treats its customers better from coming to New York in the future.

This is like banning car sales in the state because one unscrupulous seller engaged in fraud. This is like banning the sale of stocks in New York State because on unscrupulous brokerage traded against its own customers (used them for backstops).

Whether people should be free to buy used cars or invest in stocks shouldn't be an issue.

[paulrvalentine]

The inside information issue was really a farce. As some professional gamblers pointed out, you could spend $5 on some Thursday-Mon contests and easily extrapolate all the same information the employees had access too. And they were just using that information to pick players who weren't being used by most people; they still required all of those players to have a good game at once, which is more luck than anything, especially if your strategy entirely consists of "who are the people nobody thinks will have a good game?"

The real people "gaming" the system (in some people's minds) are the people who can afford to drop thousands of bucks on unlimited entry games knowing that having 2,000 entries in each contest meant they'd generally come out ahead after several games. This was "unfair" in the same way people feel it's unfair that rich people can make larger investments than they can (nevermind that there are plenty of contests that limit the amount of entries you can have and eliminate the issue).

[HeteroPatriarch]

Are you always this repetitive?

[Ken Shultz]

You love it.

It makes you horny.

You can't live without it.

You love it, and you can't stand to live without it.

[Lord at War]

FanDuel failed to protect its own brand pay off the politicians.

Fixed that.

There's a reason I can bet just about any horse track I want on 5 different continents...

[Just say Nikki]

Meh, whatever, these sites were just for junkies anyway.

[SugarFree]

I knew a junkie that was also a gambler, so I trust the state.

[Citizen X]

I knew a junkie who switched his addiction from heroin to fantasy football. The state took his kids but we're only getting his side of the story because he won't sign a waiver.

[Playa Manhattan.]

So... He wants to force them to give back money to the people who lost it according to the rules?

It's like he's trying to do the opposite of the right thing.

[Reactionary Moment]

What about the winners, why don't they have to give back the money they won if the loser get reimbursed.

[The Hyperbole (?'s r 2D)]

I'd wager that most of the losers lost honestly, but wasn't there some kerfuffle about insiders of one company scamming clients of the other or something like that?

[Ken Shultz]

I think they were pushing the false advertising angle on that--which isn't entirely without merit.

I used FanDuel for years, but some of their advertising (especially in regards to payouts) read like the ads you see from ambulance chasing personal injury attorneys during the Jerry Springer Show.

Capitalism doesn't guarantee that any given company won't treat its customers like shit. It just guarantees that there will be consequences for doing so. Those consequences don't need to come from government--anybody who lost money because of false advertising can sue. But they weren't just going after FanDuel because it's gambling.

The questions were about 1) whether FanDuel and Draft Kings employees were using inside information to play against customers and 2) whether their advertising was false. Those are both legitimate concerns--even if the government has no business interfering in people's ability to play.

[Playa Manhattan.]

Yeah, but what the AG is doing is even worse (although the NY AG's office has a long and storied history of fucknuttery).

The losers lost their money. It's gone. If there was cheating, prosecute the cheaters and get restitution for the victims. If not, stay the fuck out of it.

This reminds me of my brother's situation in Vegas. He used to gamble underage with a fake ID (way before 9/11 when it wasn't a federal crime) They had no problem with him when he was losing. They would take his cash and change it into chips without batting an eyelash. But when it came time to turn the chips back into cash, then they suddenly cared about his age. He was stuck with a $2,000 voucher because they wouldn't cash it without 2 forms of ID.

A minor technicality becomes more important than Right and Wrong as soon as the government gets involved.

[Ask Me Abt Waste Fraud & Abuse]

legal fight over whether consumers have the right to participate in these fantasy leagues

This shouldn't even be a question.

This is why I hate the world.

[Hyperion]

this

[Rufus The Monocled Derp Slayer]

Wow.

Wow. I know the government is filled with idiots but wow.

More black markets created by the nannies.

"...Schneiderman will until after the two companies appeal before trying to force them to pay back the money New Yorkers lost participating in the programs...."

Wow.

Wouldn't surprise me if Schneiderman (which sounds way too suspiciously like Spider-Man) dabbled in the vice himself.

[SugarFree]

I see only two real arguments for shutting down these sites:

1. To save people from themselves.

2. To keep them from competing with other established gambling operations.

Neither sways me in the least.

[Ask Me Abt Waste Fraud & Abuse]

Well, when I wrote a letter to my Congressional representation back when I was no longer able to use my own money to play poker online, they assured me it was "FOR TEH CHILDRUNZ!"

I really wish I still had that letter from Chuck Robb. The fucker.

[Rufus The Monocled Derp Slayer]

How is the mob and its relation with the government these days anyway?

[Free Society]

Well we just can't have money change hands without proclamations by political bodies condemning, condoning and/or regulating those transactions. That's all that separates us from Somalia.

[Ken Shultz]

How 'bout Nevada shutting down FanDuel in the state?

That sure as hell isn't because they're opposed to gambling.

It's because they don't want the casinos that cater to locals, Station Casinos, et. al., to have to compete with FanDuel.

[Agammamon]

". . . Schneiderman will until after the two companies . . . "

Will *wait*?

[Uncle Jay]

The Nanny Always Wins: Daily Fantasy Sports Stop Operations in New York
DraftKings, FanDuel hoping for legislation to give them permission to exist.

We all need more laws to ensure we don't act like adults and make our decisions.
Otherwise the ruling elitist turds who enslave us will stop treating us like children.

[croaker]

This is the same New York that's going after a volunteer fire company for raffling off a car.

Don't hold your breath.

[Lorenzo Zoil]

NY, Approved fun only.

Or;

NY, We won't let you fail.

Or;

NY, Try not to think, that's our job.

Or;

NY, If your not a progressive we'll make you one.

Or;

NY, we know better than you.

Or;

NY, you're not smart enough to think for yourself.

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[Vanguard96]

Typical power grab in the name of the "common good".

[Rose Ramsey]

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