DraftKings, FanDuel Pull Up Roots In Idaho: AG Says Daily Fantasy Sports Are Illegal Gambling

Posted on May 2, 2016
Written By on May 2, 2016

[toc]DraftKings and FanDuel stopped offering paid daily fantasy sports contests in Idaho on Monday after an agreement with the state attorney general, the second such agreement between a state and the top sites in a week.

The sites pulled out of Alabama following a similar agreement.

What the Idaho AG did on DFS

Idaho Attorney General Lawrence Wasden issued a press release regarding the agreement with FanDuel and DraftKings, after “three months of negotiations.”

The agreement took effect after May 1, per the AG’s office.

DFS is gambling, AG says

Like many states before it, Wasden came to the conclusion that DFS runs afoul of the state’s gambling laws.

From the release:

“The concern I have is that the paid daily sports offerings provided by these companies constitute gambling under Idaho law,” Attorney General Wasden said. “I have a duty to enforce and uphold that law.  I commend the companies for negotiating in good faith and agreeing not to make these contests available in Idaho.”

Wasden began a review of the companies and their websites in January amid concerns regarding the legality of the daily fantasy sports contests offered by those companies.  The Idaho Constitution prohibits gambling except for the state lottery, pari-mutuel betting as well as bingo and raffle games.

“Idaho defines gambling, in part, as risking money or other thing of value for gain that is contingent in whole or part upon chance or the outcome of an event, including a sporting event,” Wasden said. “My concern is that the daily fantasy sports offerings my office reviewed require participants to risk money for a cash prize contingent upon individual athletes’ collective performances in various future sporting events. As I see it, this falls within Idaho’s definition of gambling.”

Also of note from the AG release

Besides saying DFS is illegal as offered by DraftKings and FanDuel, the AG offered the following caveats:

  • The sites could continue offering free-to-play contests in the state.
  • Wasden also noted that the legislature could act to legalize and regulate DFS contests, or that contests could “resume if a court with authority and jurisdiction in Idaho rules in favor of any form of such contests.”
  • The sites could restart offering paid contests in the state, but agreed to give the AG 30 days notice, as an opportunity to  “evaluate the proposed contests to determine whether they comply with Idaho law.”
  • The agreement is not “an admission of liability or evidence of wrongdoing” by DraftKings or FanDuel.
  • The release made no specific mention of other DFS operators.

The latest negative opinion, blocked state for DFS

Idaho became the 11th state where an AG believes that daily fantasy sports constitutes gambling under state law. One of those opinions — from the AG in Tennessee — was rendered moot by a bill signed into law last week.

The number of states where the two sites do not operate has more doubled in the past six months. DraftKings is officially out of 11 states, while FanDuel does not serve 12 state states.

The only point of divergence between the two DFS operators is Texas. FanDuel left the state on Monday as part of an earlier agreement, while DraftKings is fighting the AG in court.

The states served by FanDuel and DraftKings do not line up directly with the AG opinions, however. For instance, both sites still serve Georgia, Vermont and Illinois, despite negative opinions from AGs in those states.

With the subtraction of Texas and Idaho today, FanDuel now serves less than 75% of the U.S. population.

Outside of the five states where DFS sites have never operated — Louisiana, Washington, Iowa, Montana and Arizona — DraftKings and FanDuel have both left six states in the past six months:

  • Nevada
  • New York
  • Mississippi
  • Hawaii
  • Alabama
  • Idaho

Mississippi could be added back to the list of states they serve if the governor, Phil Bryant, signs a bill currently on his desk.

Reaction from FanDuel, DraftKings

FanDuel sent the following statement to users in Idaho:

We have some important news to share regarding FanDuel contests for players in Idaho.

We believe FanDuel has always operated within the law in Idaho, however, as we continue to evaluate the legal framework, we have decided to suspend our paid operations in the state. As has always been the case, users in Idaho can withdraw their funds at any time.

We are continually working to clarify the law and look forward to working with legislators to enact consumer protections so that we can bring our paid contests back to Idaho sports fans once again. In the meantime, please show your support by going to www.fantasysportsforall.com/connect/idaho and let your elected officials know how much you enjoy playing fantasy sports. 

DraftKings offered this statement to Legal Sports Report:

“While we disagree with the Attorney General’s conclusions and know that daily fantasy sports players join in our disappointment that we are ceasing operations in Idaho, we look forward to continued and constructive engagement with state legislators. DraftKings is working with lawmakers across the country to enact fantasy sports legislation, so that our loyal fans can continue to enjoy the games they love.”

Image credit: B Brown / Shutterstock.com

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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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