Eric Schneiderman ordered those sites to stop accepting entries -- stating that their games constitute illegal gambling under New York state law.
He stated: “Daily fantasy sports is neither victimless nor harmless. 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.”
ESPN’s Darren Rovell says about 10% of customer bases for both DraftKings and FanDuel -- two of the biggest daily fantasy sports companies -- come from the New York area. DraftKings says there were more than 500,000 daily fantasy sports users in New York State.
How does this decision affect TV advertising?
In response to this question, left on a support area at DraftKings, a customer experience team leader named Brandon said: “If you're like us and you believe that daily fantasy sports is fun, entertaining, and a game of skill, please use the link below and let [Eric Schneiderman] know that New York has bigger challenges than fantasy football,” directing Media Daily News to a Fantasy Sports Trade Association area. An FanDuel representative did not comment.
But sources close to the companies expect little to change in regards to daily fantasy sites national TV advertising plans.
Both DraftKings and FanDuel have rocketed to be among the top NFL TV advertisers -- spending millions. Together, the companies have raised some $800 million in private investments.
Media companies -- Time Warner and Fox Sports -- have equity interests in daily fantasy operations. ESPN has an extensive TV advertising/marketing deal with DraftKings.
One key 2006 court decision that gave these companies the go ahead to begin Internet daily fantasy sports businesses concluded that fantasy leagues are “games of skill” not “games of chance,” which means gambling.
Last month, Nevada regulators rules that daily sports fantasy companies should be considered gambling. Experts believe more states will make similar moves.