As The Buffalo News’ Tom Precious reports, “A state judge Monday [October 29, 2018] ruled that daily fantasy sports contests are a form of gambling as defined by the constitution, and as such the Legislature did not have the authority to allow it as a legal gambling activity in 2016.”
You’ve probably heard of companies like DraftKings and FanDuel. These are sports betting operations. In 2016, Governor Andrew Cuomo signed a bill into law that allowed fantasy sports gambling, like the kind promoted by DraftKings and FanDuel, in New York State. The law defined fantasy sports as games of skill, not games of chance; it was expected to add $4 million per year in taxes and fees to the state’s coffers. The new revenue stream was the result of a fifteen percent tax legislators placed on the activity.
Daily fantasy sports betting may be popular among some sports fans, but gambling interests were concerned that fantasy sports betting wouldn’t survive a legal challenge. Both DraftKings and FanDuel had halted their activities in New York in early 2016 after being sued by [then] New York Attorney General Eric Schneiderman, and further court challenges were expected. However, following Cuomo’s approval of the bill in late 2016, sports betting outfits renewed operations.
Key to the Attorney General’s initial action against outfits like DraftKings and FanDuel was that they were allegedly engaged in illegal gambling activities. When Gov. Andrew Cuomo signed the sports betting bill over New Yorkers for Constitutional Freedoms’ protest, our organization said, “It is hard to ignore the fact that the Legislature has once again circumvented the State Constitution in an attempt to legitimize an otherwise illegal gambling operation. Changing the definition of words or the legal classification of an activity, does not constitute a change in reality.”
New Yorkers for Constitutional Freedoms is grateful that the court has concurred with our conclusion. However, according to LegalSportsReport.com, “it appears the industry will be unaffected in the short term, at least. New York still has enabling legislation on the books, and shutting sites down would take more intervention.” The State is expected to appeal the decision, which may involve a stay of the court’s decision, and the sports gambling saga will continue.