FanDuel bars NY players as Schneiderman seeks injunction

FanDuel, one of the nation's largest daily fantasy sports operators, temporarily blocked New York players from entering contests Tuesday, just hours after state Attorney General Eric T. Schneiderman formally accused it and DraftKings of conducting illegal gambling.

FanDuel, based in New York, suspended doing business with any New York residents as of 2:30 p.m. EST Tuesday, but maintained it was operating legally and looking forward to resuming business in the state when the case is settled.

"We believe that this restriction is temporary and we hope to be able to offer our paid contests to New Yorkers again very soon," the company said in a statement posted on its web site.

Earlier Tuesday, Schneiderman, a Democrat, asked the state Supreme Court for an injunction shuttering FanDuel and DraftKings, the nation's two leading fantasy sports companies, one week after sending them a cease-and-desist letter. The letter was effectively a warning that Schneiderman might sue, which he followed up on.

Daily fantasy sports games are "nothing more than a rebranding of sports betting," Schneiderman said in a statement. "It is plainly illegal."

Technically, Schneiderman's request is for an immediate shutdown. Practically, the motion likely won't be entertained until Wednesday, Nov. 25, at the earliest, the date Supreme Court Justice Manuel Mendez has ordered the parties back to court.

FanDuel said it was forced to stop taking new deposits from New York players last week, after Schneiderman pressured its payment processors. Tuesday, it took things one step farther by stopping New Yorkers from playing.

"As has been the case, all users in New York can and will absolutely be able to withdraw their money at anytime. However, we believe we will have an update from the court in 10 days and hope to be able to offer paid contests to New Yorkers again," the company said on its web site.

In contrast, Boston-based DraftKings successfully sought a temporary restraining order in Massachusetts that requires payment processors to continue working with the company. In an email, the company told clients: "Your right to play DFS in New York will remain unchanged unless a New York court decides otherwise."

"We believe the Attorney General's view of this issue is based on an incomplete understanding of the facts about how our business operates and a fundamental misinterpretation and misapplication of the law," company spokesman Ben Spicehandler said.

Schneiderman's action came one month after Nevada halted DraftKings and FanDuel from operating there. But more is at stake in the New York fight -- it has more fantasy sports players than any other state, according to Reuters.