After two hours of testimony Wednesday, New York Supreme Court Judge Manuel Mendez is reserving judgment in the state Attorney General’s office attempt to shut down DraftKings and FanDuel.
Attorneys for each party took turns pleading their case in front of Mendez, who was mostly impassive during the proceedings, according to accounts of those in attendance. A decision is expected “very soon,” Mendez said.
The legal skirmish in New York that led to Wednesday’s hearing began in earnest when Attorney General Eric Schneiderman sent FanDuel and DraftKings cease-and-desist orders on Nov. 10 based on the position that they were illegal gambling operations according to state law.
Outlining his case in various court filings since then, Schneiderman said daily fantasy contests are distinct from season-long fantasy sports and is “plainly illegal” because DFS participants have no influence over the performance of the athletes they choose and that daily fantasy games qualify as “contests of chance” because outcomes are determined by a material element of luck.
DraftKings attorney David Boies pounced on the distinction between daily and season-long variants of fantasy sports, prompting one of Mendez’s only questions of the day.
#DFS Boise: Doesn’t waste time. Starts out with @AGSchneiderman distinction between daily and season long.
— USLaw.com (@USLaw_com) November 25, 2015
Boise: What’s true for seasonal is true for daily. If contests that have prizes, entry fees are lawful for seasonal, then same for #DFS
— USLaw.com (@USLaw_com) November 25, 2015
Judge: Don’t understand why daily attacked by state but not traditional fantasy. #DFS
— USLaw.com (@USLaw_com) November 25, 2015
Arguments from both sides focused on the issues of skill vs. chance in daily fantasy contests, as well as the amount or lack of control exhibited by competitors in DFS.
Unlike many states where games avoid gambling designation if skill is a predominant factor, games in New York are considered gambling if chance is a “material element.” It’s a subjective threshold, and what constitutes a “material element” of chance is debated.
FanDuel and DraftKings also dispute the Attorney General’s assertion that DFS players lack control in the contests, claiming participants exert substantial influence over the eventual outcome through the process of lineup creation.
FanDuel stopped accepting customers in New York after its request for a temporary restraining order was denied last week. DraftKings has continued with its regular business operations in the state.