Anti-Gambling Group Lawsuit to Stop Online Fantasy Sports

The Stop Predatory Gambling (“SPG”) advocacy group seeks to permanently end daily fantasy sports teams in New York. SPG filed suit with the New York Supreme Court concerning the constitutionality of a new law legalizing and regulating daily fantasy sports in New York.

This past summer, Governor Andrew Cuomo enacted a law to allow the continuation of daily fantasy sports in New York. The law requires the Gaming Commission pay an annual fee of as much as $50,000 with a 15% tax on their revenue. It also bars users under the age of 18 from playing.

The SPG contends that Governor Cuomo and lawmakers exceeded their authority and needed to let the voters decide whether New York State could legalize gambling through online daily fantasy sports contests. The suit claims that fantasy sports contests are gambling.

In the fantasy league, players choose athletes for their teams, using the athlete’s actual performance statistics to determine the winner. Players are charged an entry fee and win prizes for outperforming other contestants’ rosters.

The suit seeks a declaratory judgment that the contests are in violation of the constitution and a permanent order to end the contests offered by companies like DraftKings and FanDuel, which have more than one million New York customers.

Proponents of the daily fantasy sports argue that daily fantasy sports are not gambling. They argue that legislature defined daily fantasy sports as a game of skill and not gambling and thus is not subject to SPG’s constitutional attack.

Whether the legislature has the power to define “gambling” without amending the constitution is at the core of this case.

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