Earlier this year, in late October 2018, the New York State Supreme Court ruled on the issue of daily Fantasy Sports (DFS) contests in the state. The ruling mandated that DFS contests were to be considered illegal gambling under the state constitution and could no longer be defined as games of skill. By doing this, the court has essentially overturned a law that classified DFS as a game of skill and specifically legalised the activity for players in the state. The bill was passed in 2016 and signed into law by Governor Andrew Cuomo.
The crazy state of DFS in New York
Thanks to the latest decision by the New York State Supreme Court, the New York State Gaming Commission (NYSGC) has had to stop their regulatory oversight of the DFS operating in the state. Buffalo News reported on Monday that the NYSGC had removed all references to the DFS industry from its website.
A spokesman for the commission also confirmed that because of the recent court ruling, the NYGC could no longer regulate contests of this nature. The newspaper declared that New York had “become the Wild West for the daily fantasy sports industry. Essentially, DFS is illegal in New York, but offering it has been decriminalised, and while it remains illegal it cannot be licensed or taxed.”
The DFS industry is expected to remain unregulated in New York for a while. This confusion is likely to last at the very least until the state appeals against the ruling. While most are expecting such an appeal to be launched, it cannot be done before the next month.
The anti-gambling groups contributed to the mess
The case had been brought on by a cluster of anti- gambling groups. They have argued that the state of New York should not have been able to legalise DFS contests. They should have only been able to do it through a public referendum that would have changed the constitution.
The judge agreed with the groups and decided that DFS was unconstitutional. However, unfortunately this has created a big mess now. It has created a situation, where the DFS sites are permitted to continue to operate just as they were doing before, but without any of the checks or balances; or even tax requirements. This could have hardly been the intention of the anti- gambling groups or the court; especially at the height of the NFL season.
In a confusing decision, Acting Supreme Court Justice, Gerald Connolly, shot down the legislature’s effort to legalise DFS. However, he left a clause in the old law credible, which dropped any criminal penalties against DFS operators. He also ruled that lawmakers had been within their rights to exempt DFS from New York’s gambling law.
No -Man’s Land for everyone
So it turns out, as of now DFS is illegal in New York, but offering it is not a criminal offense. While it remains illegal, the activity can neither be licensed nor taxed. The FanDuel Group issued a statement on the matter on Monday. They said that they cannot contest the ruling because of the dubious nature of it.
The statement read, “The decision makes clear that the New York legislature’s decision to exclude fantasy contests from the definition of illegal gambling cannot be challenged in court. Accordingly, we will continue to offer fantasy sports to New Yorkers.”
FanDuel Group added that although they are no longer under the obligation to uphold their license agreements, they strongly believe in a regulated market and therefore would strive to reinstate regulatory control. The statement continued, “We also believe in the benefits of regulation and will cooperate with efforts to permanently restore regulatory oversight.”
The lawyer for the anti- gambling groups, Cornelius Murray, told The Buffalo News that his clients were considering a number of options at the moment. He too admitted that the laws regarding DFS were a little confusing at the moment. He added that it was hard to see how this will pan out, but with a little time the issue can easily be resolved.
He said, “We’re in that proverbial no- man’s land for the time being. I think the dust will settle, but it’s kind of a vague, difficult- to- describe period right now.”