Attorney David Boies, recently retained as counsel for DraftKings, outlined his client’s case in New York during a conference call with the media on Friday.
The top-level takeaway from Boies? New York attorney general Eric Schneiderman “is not entitled to unilaterally change the law.”
Here is a closer look of some of the main points Boies touched on in advance of a hearing on Wednesday when injunctions from Schneiderman, DraftKings and FanDuel, as the AG attempts to shut them down in his state:
Skill is a big part of playing DFS
The idea that DFS is a game of skill has always been a part of the calculus of DFS operators, and is the basis for DraftKings, and everyone else, for operating in New York and nearly every other jurisdiction.
In particular, Boies harped on the “control or influence” language in the definition of “gambling” under the NY penal code:
“Gambling.” A person engages in gambling when he stakes or risks something of value upon the outcome of a contest of chance or a future contingent event not under his control or influence, upon an agreement or understanding that he will receive something of value in the event of a certain outcome.
“If you are able to influence the game or control the game, and the language in the statute is control or influence, then it is not gambling under New York law,” Boies said. “Anyone who believes that daily fantasy sports players do not control or influence how they do in those contests, has never played those contests. Those contests require a great deal of skill, and skill is what gives people the ability to influence or control the outcome.”
The AG is relying on the casual definition of gambling rather than the NY legal definition
Boies took issue with Schneiderman not focusing on the law — he was asked about the AG’s op-ed in the New York Daily News earlier in the day and referenced some of the AG’s filings and exhibits, where DFS executives even talked about themselves as and compared themselves with gambling operators or casinos.
“Instead, when they spend as much time as they do [talking about] if somebody used the word gambling, that reveals that they are trying to distract attention from what the real legal definition is here,” Boies said.
Some of the references the NY AG is relying upon came into the Nevada AG’s analysis of whether DFS is gambling in that state (Nevada determined that it was.) Whether the judge will be swayed by either side of this argument is obviously an open question.
DFS companies have been operating in New York for years without legal issues
On more than one occasion, Boies pointed out that New York had let DFS alone for most of its existence, saying Schneiderman had “obviously changed his mind” on the legality of DFS. He opened his comments with this:
“FanDuel has been openly operating these contests in New York for almost 8 years,” Boies said. “DraftKings itself has been openly offering these contests in New York for almost four years. Never, until about 10 days ago, had anyone — not the attorney general, not anybody in the attorney general’s office, not any other public official — hinted, asserted that there was anything illegal about what FanDuel and DraftKings were doing.”
It’s definitely easy to take issue with some of this, as most attorneys general had likely not even considered the DFS industry until this year. Even Maura Healey — who is now as well informed about the DFS industry as any AG in the country — didn’t review the legality of the industry until this fall.
Schneiderman also definitely hinted that there might be a problem with DraftKings and FanDuel before ten days ago. Early in October, Schneiderman called DFS sites “totally unregulated gambling venues.” One could argue that’s a pretty good indication of what he was thinking.
Other interesting information from the call
- Boies indicated the judge may not decide immediately after the hearing on Wednesday, and may take some time after the arguments are presented.
- DraftKings will consider an immediate appeal if the judge sides with the AG.
- Part of the NY AG’s case has to do with alleged false advertising by FanDuel and DraftKings. That topic was not broached in the call, as the gambling part of the case was discussed almost exclusively.