Judge rejects FanDuel, DraftKings restraining order request

A state judge Monday rejected the requests of FanDuel and DraftKings to issue a restraining order to prevent Attorney General Eric Schneiderman from shutting down the fantasy sports operations in New York.

But Supreme Court Justice Manuel Mendez ordered the parties back in court on Nov. 25.

Meanwhile, on another front in the escalating battle, a Buffalo-area state senator introduced legislation to keep fantasy sports from being considered illegal in New York.

Boston-based DraftKings and New York-based FanDuel, which combined control 95 percent of the fantasy sports market, asked the state Supreme Court in Manhattan to issue a preliminary injunction that would prevent Schneiderman from acting on a "cease and desist" letter he sent to the companies last week.

The attorney general contends fantasy sports are games of chance, not skill, and, therefore, a form of gambling not allowed in the state. His action comes right in the middle of NFL season and about a month after Nevada booted the companies from that state.

The companies claimed Schneiderman has overstepped his authority and misinterpreted the law. In a related action, the companies sued the attorney general Friday and asked the court to summarily declare that fantasy sports don't constitute "gambling" or "bookmaking" as defined by state law.

While the fight is ongoing, FanDuel has stopped taking on new customers from New York. It is seeking the injunction in part so that it can resume regular operations, it said.

"As a result of these efforts, FanDuel is now unable to accept deposits from its customers in New York, causing incalculable, immediate and irreparable harm to FanDuel's business," the company said in court papers Monday.

DraftKings downplayed the rejection of its injunction request .

"We are confident in our legal position, and look forward to our day in court next week. As a result, we intend to continue operating in New York," the company said in a statement.

Schneiderman's office declined comment.

The attorney general's "cease and desist" letter isn't a legally binding order, but more akin to a five-day notice that requires Schneiderman to give a potential target of a lawsuit a chance to explain why a suit should not be filed, said Karl Sleight, an attorney and former head of the state's ethics commission.

Meanwhile Monday, Sen. Michael Ranzenhofer (R-Amherst) introduced a bill that "excludes participation in any fantasy or simulation sports game or educational game or contest meeting certain conditions from the definition of 'contest of chance' " and codifies that in fantasy sports "all winning outcomes reflect the relative knowledge and skill of the participants."