Important Week Ahead For Daily Fantasy Sports, Including Likely New York Verdict

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DFS December

There is a lot of news that affects the daily fantasy sports industry almost week every these days. But the upcoming week could be more crucial than others, led by the likely New York State Supreme Court ruling in the case of the state attorney general vs. DraftKings and FanDuel.

Here’s a look at what will go down this week:

The New York DFS case

Justice Manuel Mendez appears extremely likely to rule on whether to grant a preliminary injunction against DraftKings and FanDuel, as AG Eric Schneiderman is attempting to get them to stop operations in the state.

The case was heard a week and a half ago, and a verdict was promised “very soon.”

No matter what the outcome, it will be a big day for DFS. DraftKings — and by default pretty much every other DFS operator still accepting customers in the state — would likely have to exit the state if the preliminary injunction is granted. (FanDuel already left). If the sites prevail, it will be seen as a major victory.

Either way, however, it’s nowhere near the end of the court battle. Either side could appeal. And this case is just over the preliminary junction; a trial will likely come on the possibility of a permanent injunction on DFS operators’ ability to serve New York.

So, while the verdict will be a major milestone in New York, it may be closer to the beginning than the end.

The New York Assembly hearing

With the backdrop of the above case, the New York legislature will start getting serious about the future of DFS in the state. There are already four bills that have been introduced that could affect the industry.

The Assembly Committee on Racing and Wagering will consider DFS on Tuesday at 10 a.m. Eastern in an informational hearing. From the hearing’s agenda:

The Assembly Standing Committees on Racing and Wagering and Consumer Affairs and Protection would like to hear testimony regarding whether daily fantasy sports games constitute gambling under New York State law and how to insure that consumers know their rights and have the ability to make informed choices when participating in these types of games. The Committees would also like to hear testimony about the impact these games have on regulated gambling industries as well as the New York State Budget.

The list of witnesses who will be testifying is not yet known.

This is just the beginning of the conversation, and no action on any bills will be taken on Tuesday; the legislature can’t act on any bills, formally, until the new year. But we will get important insight into what lawmakers — and specifically committee chairman J. Gary Pretlow — think about DFS.

Congressional hearing about RAWA

The House Committee on Oversight and Government Reform will hold a hearing about the Restoration of America’s Wire Act on Wednesday.

This hearing only tangentially affects DFS, if at all, as RAWA seeks to ban online gambling in the United States. In reality, the bill would just serve to ban just online poker and casino games, as a number of carveouts exist in the legislation, including one for fantasy sports.

There has been no impetus for adding DFS to the legislation, so far, and there’s also little chance that RAWA will become law, as currently constructed. But it’s at least worth monitoring if the subject of DFS comes up.

Massachusetts Gaming Commission

A “Daily Fantasy Sports Public Forum” will be held by the Massachusetts Gaming Commission on Thursday at 9 a.m. Eastern.

The agenda and the aim of the forum are up in the air right now. But the MGC continues to take its own track, even after Massachusetts Attorney General Maura Healey proposed regulations for the industry last month.

During a meeting in October, an attorney for the MGC reported that it believed the “legal status of DFS is in flux,” and a white paper on the topic was planned.

What the MGC says about DFS in the commonwealth could very well impact what the legislature decides to do with the industry, entirely independent of what the AG has planned. So any time the commission talks about DFS, it’s potentially important for Massachusetts.

NCSL panel

Also on Thursday, at 8:30 a.m. Eastern, the National Conference of State Legislatures will hold a panel at its weeklong Capitol Forum called Out of Bounds? A Legal Analysis of Pay-to-Play Fantasy Sports. More from the NCSL agenda:

People have been playing traditional fantasy sports for decades, but daily fantasy sport sites have become big business in the U.S. Recently, DraftKings and FanDuel have been accused of “insider trading” and both companies have been named in a new class action lawsuit alleging negligence, fraud and false advertising. Learn more about fantasy sports’ legal standing, the validity of these accusations, and what states can do to regulate this new industry.

The panel comes as the NCSL is paying a lot of attention to the DFS industry, meaning more states could start looking at legislative tracks, and a more uniform approach to legislation could result in 2016 and beyond.