Less than six hours after Justice Manuel Mendez granted New York Attorney General Eric Schneiderman a temporary injunction that would stop DraftKings and FanDuel from doing business, an appellate court judge gave the two daily fantasy sites an emergency temporary stay that will allow them to accept entries from New Yorkers.
Randy Mastro of Gibson Dunn, outside council for DraftKings, told ESPN.com that the stay likely will be in place until the end of the calendar year. Eventually, both sides will go before a panel of four or five appellate judges, Mastro said.
“We remain open for business for the hundreds of thousands of New Yorkers who enjoy daily fantasy sports,” Mastro said.
DraftKings has stayed open in New York throughout the challenges made by the attorney general. FanDuel, which pulled itself out of the New York market on Nov. 17, will allow fans to once again play on its site starting Friday night, said spokeswoman Justine Sacco.
Friday’s ruling does not negate the interpretation made by Mendez that DraftKings and FanDuel were illegally operating within the state. Mendez agreed with Schneiderman’s contention that the companies are operating illegal gambling sites based on how New York law defines gambling.
Lawyers for DraftKings and FanDuel argued that their clients could not have violated gambling statutes because they were taking in entry fees and not wagers. The main support for their contention was a New Jersey case — an unpublished decision in Humphrey v. Viacom (2007) — that Mendez disregarded, saying that what they took in were in fact bets under New York law.
“New York State penal law does not refer to ‘wagering’ or ‘betting,’ rather it states that a person, ‘risks something of value,'” Mendez wrote. “The payment of an ‘entry fee’ as high as $10,600 on one or more contests daily could certainly be deemed risking ‘something of value.'”
Meanwhile, New York Assemblyman Dean Murray introduced two bills Friday that would change New York law and make daily fantasy legal in the state.
Assembly Bill A08588 would remove daily fantasy from being considered a game of chance in New York penal law and is Murray’s preferred choice. His other daily fantasy bill, Assembly Bill A08587, would amend an article in the state’s constitution and could require the federal prohibition on sports betting, the Professional and Amateur Sports Protection Act, to be amended or repealed.
Murray is confident one of the bills will pass, but it might take a while. The New York Legislature convenes in mid-January.
“Realistically, you’re looking at May or June,” he said.
If the attorney general’s case against the two major DFS sites lingers into the spring and Murray’s legislation is passed legalizing daily fantasy in New York, the former case would be over, Murray said.
Florida, California and Illinois, in addition to New York, are among the states that have introduced daily fantasy legislation this year.
Schneiderman had previously said that he was interested in having DraftKings and FanDuel undo their deals with teams within the state and stop advertising. Apron signage for the companies at New York Knicks and Brooklyn Nets games would have to come off for national games.
The NBA owns equity in FanDuel, and Major League Baseball and the NHL own equity in DraftKings. The NFL does not own equity in either daily fantasy operator, but almost all the league’s teams have advertising partnerships with one of them. New England Patriots owner Robert Kraft and Dallas Cowboys owner Jerry Jones also own equity in DraftKings.
At least 600,000 New Yorkers play daily fantasy on DraftKings and FanDuel, having put up more than $200 million in entry fees combined in 2015.
ESPN’s David Purdum contributed to this report.