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Judge rejects order to keep daily fantasy in NY

Judge rejects order to keep daily fantasy in NY
Posted at 7:42 PM, Nov 16, 2015
and last updated 2015-11-16 22:42:37-05

NEW YORK (AP) — A New York judge on Monday rejected the requests of daily fantasy sports operators DraftKings and FanDuel for temporary restraining orders to block the state attorney general's attempt to shut them down.

In separate complaints filed Friday in state Supreme Court in Manhattan, FanDuel and DraftKings first asked a judge for an injunction, arguing that Attorney General Eric Schneiderman wrongly characterized their businesses as illegal gambling operations.

On Monday, Boston-based DraftKings and New York-based FanDuel asked Justice Manuel Mendez for an immediate restraining order to stop Schneiderman until they can present their case. Each said they face irreparable damage otherwise.

DraftKings said it has 375,000 New Yorkers among some 2.5 million players, and that the attorney general told its vendors in letters that it was at risk of not doing business in New York anymore.

FanDuel said it has over 1 million users, with "hundreds of thousands" in New York whose deposits it has been unable to process since Friday. The company blamed that on Schneiderman's office, saying it has already contacted the bank and payment processors handling FanDuel's customer deposits and withdrawals, deterring them from continuing.

Schneiderman's lawyers told Mendez at a hearing late Monday that they hadn't done anything to actually prevent the companies from doing business in New York, and therefore he couldn't issue an order to stop it.

Mendez agreed. "They have not taken action yet to somehow enjoin the plaintiff from continuing to engage in their business here in New York," he said. He ordered them back to court on Nov. 25.

The case began with cease and desist letters sent by the attorney general last week, warning DraftKings and FanDuel they should stop conducting illegal gambling in New York.

DraftKings and FanDuel argue that they offer games of skill, not of chance, as defined New York's gambling laws.

DraftKings said it was "confident in our legal position" and intended to keep operating in the state.