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Gambling fight stepped up in US

FanDuel hires lawyer to fight New York state ban on games

Lesley Eccles at parliamentDaily fantasy sports sites DraftKings and FanDuel have filed law suits against the New York attorney general Eric Schneiderman seeking an injunction against his order banning their activities in the state.

Fans of the games demonstrated outside Mr Schneiderman’s office in a show of support for the two companies who are now in a new battle against those who regard their operations as gambling rather than games of skill.

On Tuesday, Mr Schneiderman sent cease and desist letters to the companies ordering them to stop operating paid contests in the state. Fanduel said it had stopped taking new deposits on the back of the order.

In a statement,  Mr Schneiderman said that “daily fantasy sports companies are engaged in illegal gambling under New York law… DraftKings and FanDuel are the leaders of a massive, multi-billion-dollar scheme intended to evade the law and fleece sports fans across the country. Today we have sent a clear message: not in New York, and not on my watch.”

FanDuel, which is dual headquartered in Edinburgh and New York, and run by Lesley (pictured) and Nigel Eccles, has hired Marc Zwillinger, a notable information security attorney, while DraftKings has retained the high-profile legal firm Boies, Schiller and the firm Gibson, Dunne.

Mr Boies represented Al Gore in the 2000 presidential election vote-counting lawsuit. DraftKings is taking the matter so seriously it has its advertising budget to fund the legal costs, according to Bloomberg.

The lawsuits are said to differ in that DraftKings has filed a “petition and complaint” against Schneiderman, seeking to stop him from carrying out his threat. FanDuel’s filing is a “complaint for declaratory and injunctive relief” in order to prevent Mr Schneiderman “from pursuing further efforts to shut down FanDuel’s enormously popular fantasy sports activities in New York state.”

It is understood both companies will seek to convince a judge that Mr Schneiderman has misinterpreted New York gambling law. Both claim legitimacy under the 2006 Unlawful Internet Gambling Enforcement Act which excluded fantasy sports games from the strict ban on online gambling.

The two companies have been active in 45 states while they have chosen not to operate in five because the state law was unfavourable. Nevada’s Gaming Control Board reduced the active number to 44 when it ruled they were operating a gambling company.

The row has been rumbling for some time following concerns raised in Congress. It intensified by a so-called “insider trading” incident when an employee of DraftKings used “inside information” to win a $350,000 prize on FanDuel. The companies said the accounts of what happened were incorrect. However, both banned their employees from playing the games.

 

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