(Reuters) – Daily fantasy sports sites FanDuel and DraftKings are prepared to fight in court against New York state’s top prosecutor, who said that they were running illegal gambling operations and ordered them to stop taking bets in the state.
DraftKings called the cease and desist letters from New York Attorney General Eric Schneiderman on Tuesday “hasty and uninformed” and said it was prepared to mount a legal challenge so the company could continue operating in the state.
“We will pursue this fight to the fullest to ensure that New York fantasy sports fans do not need to stop playing,” DraftKings said in a statement yesterday.
FanDuel said it believes Schneiderman’s letter, which refers to the company as a bookmaking operation, has no basis in New York law. The company said it is considering all its legal options.
“We’re a legal game,” FanDuel CEO Nigel Eccles said on a conference call with reporters. “We feel the AG’s office has taken the very extreme and very sudden position that New Yorkers are not capable of making their own decisions when it comes to playing fantasy sports.”
In addition, DraftKings and FanDuel began mobilizing hundreds of thousands of their users in New York state, asking them to send Schneiderman emails voicing support for the games.
FanDuel said they have more than 600,000 players in the state, about 10 percent of their users; DraftKings said there were more than 500,000 daily fantasy players there.
New York has the most daily fantasy sports players of any state, according to Eilers Research.
The two companies, which have five business days to respond to the order issued by Schneiderman on Tuesday, have continued to take money from customers in the state, they said.
In the games, fans pay to compete for daily cash prizes based on imaginary teams assembled from rosters of real players, which accumulate points based on how those players perform in actual games. This has enabled fans to spend money on the games with a frequency that critics say is akin to sports betting.
Brit Devine, a Cicero, New York resident who plays fantasy sports full time and also blogs about it for the website Rotogrinders, said he is worried about losing his main source of income.
