All New York Bets are Off for DraftKings and FanDuel Through Baseball Season

The two biggest fantasy sports sites in America voluntarily agreed to stop taking bets in New York, and will wait possibly through the entirety of the professional baseball season for lawmakers to complete deliberations on formal legalization of online fantasy sports in the state.

The Deal

Announced by New York State Attorney General Eric Schneiderman Monday, DraftKings and FanDuel have agreed to stop taking bets from users with New York IP addresses and withdraw their New York clients' balances within seven days of being asked to do so. If the legislation does not pass in New York's state capitol of Albany, a state appeals court will take up the case for the September term.

This moves the dispute from the courts to the legislature, where DraftKings and FanDuel believe that a state Constitutional vote regulating fantasy sports could pass by mid-May.

Remaining Legal Dispute

Nonetheless, the creation of a general state regulation model will not get DraftKings and FanDuel off the hook from Schneiderman's allegations of false advertising and consumer fraud, levied in response to the companies flooding the internet, television, and radio with advertising at the start of the 2015 NFL season.

The Controversy

With users paying entry fees to draft teams from a common pool online before the players perform and produce the statistics that determine the fantasy winner, DraftKings and FanDuel market their contests as games of skill, not chance (the category into which sports betting or gambling would fall).

Hundreds of thousands of New Yorkers currently voluntarily and enthusiastically participate. The rules and risks remain relatively simple and certainly straightforward.

The Online Gambling Issue

The debate revolves around whether fantasy sports constitute gambling or not, because there is no law allowing gambling nor treating the issue of online gambling in New York.

The Fantasy Sports Issue

The fantasy issue specifically constitutes a debate over whether participation in pay-in fantasy leagues constitutes sports betting. The legislative vote will remove the relevance of the passionate and diverse individual perspectives out there by defining the activity that is legally permissible.