The Status Of The New York Fantasy Sports Bill: Fact And Fiction

Written By

Updated on

NY DFS Fact and Fiction

It’s been nearly a month since the New York legislature passed a bill that would formally legalize and regulate the daily fantasy sports industry.

However, you cannot play at DraftKingsFanDuel and most other operators in the state, as Gov. Andrew Cuomo has not yet signed the legislation.

That has led to a lot of questions from DFS players in the state as to why they still can’t play. Here are some questions and answers, and an attempt to separate fact from fiction on the NY DFS front:

Is DFS legal in New York yet?

The answer, for now, remains the same: Maybe.

Nothing that has happened in New York recently has changed the legal status of DFS. A bill passing the legislature does not have the force of law.

NY Attorney General Eric Schnederman issued cease-and-desist letters to DraftKings and FanDuel last year on the basis that he believed them to be illegal gambling under state law.

At the same time, here has been no final finding of legality from the court system, as a settlement in March between Schneiderman and the two biggest DFS sites has put those court cases on hold while legislation was contemplated.

DraftKings and FanDuel are still not back in New York, waiting for the bill to become law. New York does not appear as an excluded state in the terms of use of at least one DFS operator.

Did the DFS settlement run out?

No, it did not.

The original settlement with Schneiderman expired on June 30, which was originally set to coincide with the adjournment of the state legislature. That was meant to give the statehouse time to pass a bill legalizing DFS.

That, of course, did happen, but it hasn’t yet become a law with the governor’s signature. That led some to speculate that meant the settlement was null and void.

That never seemed to be a likely scenario given the tenor or the original deal between Schneiderman, DraftKings and FanDuel. The settlement, in fact, was amended to extend the agreement to July 30. You can read the amended settlement here.

And if that date comes and goes, then look for another extension.

The only way the settlement likely doesn’t stay in force is if Cuomo vetoes the bill.

Why hasn’t Cuomo signed the DFS bill?

The bill has not even been transmitted to the governor yet. Some have theorized that Cuomo is not signing the bill for some nefarious or political purpose.

While it’s impossible to rule that out, that doesn’t seem terribly likely. In reality, there’s a much simpler explanation for why the DFS bill isn’t a law yet. From the Albany Times-Union:

As has been tradition for decades, the governor calls the bills he wishes to sign or veto to his desk intermittently throughout the summer, fall and early winter until the next legislative session begins. The practice offers the governor’s office to more thoroughly review bills, rather than have to deal with thousands of them within a short time frame.

So, while the bill is a big deal for the DFS industry, Cuomo and his office have a lot on their plates other than DFS.

Is there any chance that Cuomo vetoes the bill?

This does not seem to be likely, but Cuomo’s office on a number of occasions has been non-committal on signing it.

But Cuomo’s office was at least somewhat involved in amending the bill as passed by the legislature. And, in practice, the bill was passed by veto-proof majorities in both houses. (A two-thirds vote by both the Assembly and the Senate could overturn a Cuomo veto.)

The nature of that majority in the Senate was tenuous, however, so it’s no guarantee that body would again vote for DFS, especially if an override vote would take place after the November elections.

Still, the far more likely scenario is a Cuomo signature.

So when will DFS be legal again?

That is still up for debate. As stated above, Cuomo can call for the bill any time he wishes.

Conventional wisdom says it will be sometime in the next month and a half, before the start of NFL season. If DraftKings and FanDuel don’t go live in New York by then, it would mean a major impact on their bottom lines.

The bill was passed so that, in theory they could be back in operation in short order. If it does become law, it appears that DFS sites could resume operations almost immediately upon receiving a temporary permit from the state.

At the same time, there’s no guarantee that the DFS bill will become law in that timeframe. But it would be fairly shocking if it didn’t happen by September.

Why is Schneiderman still going to court with DFS companies?

Some were left scratching their heads, or called out Schneiderman — when he issued this statement after the DFS bill’s passage:

“As I have said from the start of my office’s investigation into daily fantasy sports, my job is to enforce the law. Today, the Legislature has amended the law to legalize daily fantasy sports contests, a law that will be my job to enforce and defend. We will nevertheless continue to pursue our claims that DraftKings and FanDuel previously engaged in false advertising and consumer fraud.”

Why is he still pursuing the false advertising claims? Well, he always said he was going to, and it’s something that DraftKings and FanDuel agreed to in the settlement, if a law were passed:

The Attorney General will:
Terminate all of its claims against DraftKings in the Actions with prejudice, except that the Attorney General shall have no obligation to terminate the False Advertising Claims;

So, this is not some sort of backpedaling by Schneiderman, just something he intended to do all along.