Daily fantasy sports law unconstitutional, lawsuit claims

ALBANY — An anti-gambling group has filed a lawsuit seeking to declare daily fantasy sports games unconstitutional in New York.

The group, Stop Predatory Gambling, contended that daily fantasy sports clearly are a form of gambling not authorized by the state constitution and that Gov. Andrew M. Cuomo and legislators illegally bypassed the constitution when enacting a DFS law earlier this year.

Further, the game said that lawmakers have “misrepresented” the games — in which fans can win money based on the performance of professional athletes in football, baseball and other sports — as a game of skill, when it is, in fact, a game of chance.

The distinction is important because the state Constitution bans games of chance unless specifically authorized, such as the lottery and horse racing.

A spokesman for the largest daily fantasy sports businesses said opponents “have no case” because the law was enacted properly.

Anti-gambling advocates said daily fantasy sports exploit the addicted and the financially desperate.

“Daily fantasy sports gambling is a huge rip-off for all citizens, whether you gamble or not,” said Les Bernal, director of Stop Predatory Gambling. The lawsuit was filed in state Supreme Court in Albany.

The legality of daily fantasy sports in New York came under fire in 2015 when state Attorney General Eric T. Schneiderman filed suit against FanDuel and DraftKings — the two companies that control 95 percent of the market — seeking to shutter their operations in the state. Schneiderman, a Democrat, said DFS amounted to an illegal game of chance.

But in 2016, the state Senate and Assembly passed legislation specifically declaring DFS to be a “game of skill” to get around the prohibition. Cuomo signed the measure into law in August.

The governor’s office didn’t immediately comment on the anti-gambling lawsuit.

A spokesman for a lobbying group representing FanDuel and DraftKings said lawmakers followed the proper steps in legalizing the games.

“The state Constitution specifically gives the legislature the power to define what is — and what is not — gambling, and the legislature has done so a number of times in the past and long before the emergence of fantasy sports,” said spokesman Marc LaVorgna. “The attorney general, who certainly has had some strong opinions about fantasy sports, has clearly stated he will enforce and defend this new law. This is a layup — they have no case.”

A spokesman said Schneiderman will review the opponents’ lawsuit, but added: “The attorney general has said he will enforce and defend the law” approved in August.