WASHINGTON, Nov 10 (Reuters) – The New York state attorney general on Tuesday ordered the fantasy sports sites DraftKings and FanDuel to stop accepting bets in New York, saying that the operations were essentially illegal gambling, according to copies of letters to the companies seen by Reuters.
The letters from the office of New York Attorney General Eric Schneiderman said that the fantasy sites were considered gambling because customers “are clearly placing bets on events outside of their control or influence, specifically on the real-game performance of professional athletes.”
The letters were sent to both DraftKings and FanDuel and given to Reuters by a spokesman for Schneiderman.
The attorney general’s office said in the letters that it demanded that the companies “cease and desist from illegally accepting wagers in New York state.”
A spokesperson for DraftKings said the company was disappointed at the “hasty action.”
“We strongly disagree with the reasoning in his opinion and will examine and vigorously pursue all legal options available to ensure our over half a million customers in New York state can continue to play the fantasy sports games they love,” the spokesperson said.
FanDuel also disagreed with the decision, saying in a statement: “This is a politician telling hundreds of thousands of New Yorkers they are not allowed to play a game they love and share with friends, family, coworkers and players across the country.”
“The game has been played – legally – in New York for years and years, but after the attorney general realized he could now get himself some press coverage, he decided a game that has been around for a long, long time is suddenly now not legal,” FanDuel added.
The fantasy sports industry, in which fans pay to compete for daily cash prizes in simulated athletic contests, has come under intense scrutiny at the state and federal level following reports last month that an employee of DraftKings won $350,000 from a $25 entry in a contest run by rival FanDuel, using what reports said appeared to be insider information.
According to media reports, the U.S. Department of Justice and the Federal Bureau of Investigation are investigating the industry.
The two privately held companies say they have banned employees from playing daily fantasy sports.
(Additional reporting by Subrat Patnaik in Bengaluru; editing by Alan Crosby and G Crosse)