New York Attorney General Eric Schneiderman Loses Battle Against Daily Fantasy Sports

Posted on June 20th, 2016 by Daniel Ryder
New York daily fantasy sports Eric Schneiderman

A daily fantasy sports bill is headed to the governor’s desk in Albany, much to the dismay of New York Attorney General Eric Schneiderman, but the New York legislature felt that the online contests should be protected. (Image: Marcus Santos/New York Daily News)

New York Attorney General Eric Schneiderman’s crusade against daily fantasy sports (DFS) met its match late last week as the state legislature in Albany voted to pass a new bill to legalize the online contests. Schneiderman has been campaigning for months on the illegality of DFS, but the prominent legal authority in New York has been unopposed during that stretch until the state legislature finally chimed in.

The daily fantasy measure passed at the eleventh hour of the Assembly’s final session day for 2016, the vote coming at two in the morning to be precise. The bill will create a regulatory framework for DFS companies and tax their gross gaming revenues at 15.5 percent.

DFS leaders DraftKings and FanDuel celebrated the passage.

“New York is the seventh state to pass a fantasy sports bill just this year, frankly a remarkable amount of progress in a short period of time,” FanDuel CEO Nigel Eccles said. “It speaks to the popularity of our game, the passion and advocacy efforts of our fans and the immense potential states are seeing in the fantasy sports industry.”

The bill now makes its way to Governor Andrew Cuomo’s (D) desk for his authorization.

DFS Distances From Gambling

Poker and daily fantasy sports used to go together like cookies and milk, but that all changed during last November’s World Series of Poker (WSOP) Main Event. DraftKings was once a marquee sponsor of the card game’s biggest annual tournament, but the Boston-based company severed ties with the WSOP in what was seen as an attempt to distinguish its games as contests of skill instead of gambling luck.

Of course, most seasoned poker players would argue the same is true for the card game, but politicians haven’t seen it that way.

DFS’ entire legal basis rests on the skill component.

The 2006 Unlawful Internet Gambling Enforcement Act (UIGEA) specifically made it a crime for payment processors to knowingly accept or facilitate digital transactions related to gambling websites. The act excluded fantasy sports, which ten years ago consisted of season-long leagues typically played among friends.

DFS Wins, Poker Loses

Online poker advocates received some good news last week when the New York Senate passed a bill to regulate the game on the Internet. State Senator John Bonacic’s (R-District 42) legislation would charge operators a one-time $10 million fee and tax gross revenues at 15 percent.

The June 14 vote tallied 53-5 in support of online poker. The Poker Players Alliance (PPA) praised the approval, PPA boss John Pappas calling it a “major achievement for Internet poker regulation.”

But as fast as the celebrations started, they came to a close when the Senate’s opposite chamber decided not to take up the measure before adjourning for the year.

For all the discussions in state capitol buildings throughout the country in 2016, the poker community will be disappointed to know that the new year will be rung in with still only three legalized Internet gaming markets. Though time remains in California and potentially Pennsylvania, 2017 will likely commence with cards in the digital air in Nevada, New Jersey, and Delaware.

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