Nearly Yearlong Legal Saga Is Over For DFS Sites
Legal Sports Report

DraftKings, FanDuel Among Daily Fantasy Sports Sites Now Live In New York

NY DFS Welcome back
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The long wait is over for daily fantasy sports in New York, as several sites are returning to operation.

Who is back in New York?

DraftKings, FanDuel, Yahoo, FantasyDraft and Draft have all been issued temporary permits to operate DFS contests in the state.

The news came via the New York State Gaming Commission.

All five operators may “resume operations immediately,” according to the commission.

What the NYSGC said on DFS

More from the NYSGC:

The Commission has completed a legally required thorough review of the temporary permit applications from these five companies, ensuring required consumer protections, player safeguards and advertising restrictions are in place.

“As the newly enacted law requires, the Commission regulates all aspects of interactive fantasy sports, including ensuring the operators put important consumer protections in place,” said Commission Executive Director Robert Williams. “While the Commission continues work on formal regulations for these games, these temporary permits get companies up and running in New York State while assuring resident players that safeguards are in place.”

The NYSGC said it continues to review temporary permit applications; at least five other operators are known to have submitted such applications.

Inside the temporary NY permits

The approval of the permits for the five sites can be seen here:

Each operators had to disclose the sports and contests they would be offering in New York. For instance, here are the contests approved for DraftKings:

DraftKings NY permit

All five operators must still go through the process to receive their full licenses in the state, which will take longer than the approximately three weeks for the temporary licenses.

The history of DFS in NY

Most DFS operators had pulled out of New York in March, when DraftKings and FanDuel entered into a settlement with NY Attorney General Eric Schneiderman.

The legal battle between Schneiderman and the two largest operators started back in November of 2015 with cease-and-desist letters issued by the AG. The matter was in court before this spring’s settlement.

Earlier this month, Gov. Andrew Cuomo signed a bill formally legalizing and regulating paid-entry fantasy sports bill in the state. That came more than a month after the legislature had passed the bill initially.

A big player pool for DFS sites in NY

Becoming operational in New York is a boon to the sites that are returning to New York.

The sites will have access to the nearly 20 million people who live in New York; DraftKings and FanDuel get back hundreds of thousands of DFS users in the state who previously played in their contests.

Going into the upcoming NFL season — which starts in just over two weeks — without NY users would have created a bleak scenario for DFS sites, especially DraftKings and FanDuel. Daily fantasy football generates the majority of the annual revenue for the industry.

Instead, the five DFS sites have access to liquidity in terms of users that was not guaranteed until the temporary permits were issued.

Of course, sites are also subject to a tax on NY revenue of more than 15 percent, which is not something they had to deal with last fall when operating in an unregulated environment.

DFS operator statements

DraftKings CEO Jason Robins offered the following statement on the return of DFS to the Empire State:

“MLB pennant races are heating up, an exciting NFL season is just around the corner and we are thrilled to be able to bring DraftKings back to millions of New York sports fans. We thank the New York State Gaming Commission for being thorough and expedient in approving the return of fantasy sports to New York.  We are proud to be a leading sports-tech and entertainment company that delivers an unparalleled fantasy sports experience, with state of the art technology and a mission to bring fans closer to the sports they love than they ever thought possible. New Yorkers can play our games right now, and on behalf of everyone at our company, thank you New York and welcome back to DraftKings!”

And a FanDuel spokesperson made this statement:

“We are very excited to announce that the New York Gaming Commission has approved FanDuel’s temporary operating license in New York, allowing us to offer our paid contests in our home state. We want to thank Governor Cuomo and the New York legislature for bringing back our contests to millions of sports fans, which will be available to New York residents as of tonight. Lastly, we want to thank our users who supported us throughout and continue to tell their legislators across the country that this issue is important to them. We couldn’t have done it without all of you.”
Michael LaGuardia, Head of Product for Yahoo Sports and Finance:
“We have received our temporary permit to bring daily fantasy sports back to New York fans.  We commend the state legislature and Governor Cuomo for enacting legislation that clarifies the legal status of daily offerings.  The new law supports a competitive marketplace, innovation and a more level playing field among users.”
FantasyDraft COO and co-founder Steve Krombolz:
“We are very happy to be back and appreciate the gaming commission making the temporary permit available in a timely manner. We have missed our NY customers and couldn’t be happier to be able to welcome them back for the 2016 NFL season.”
Dustin Gouker
- Dustin Gouker has been a sports journalist for more than 15 years, working as a reporter, editor and designer -- including stops at The Washington Post and the D.C. Examiner.
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