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Daily fantasy sports agree to stop taking bets in NY

The fantasy sports website DraftKings is shown on

The fantasy sports website DraftKings is shown on Oct. 16, 2015 in Chicago. Credit: Getty Images / Scott Olson

The two biggest daily fantasy sports companies have agreed to stop taking bets from New Yorkers while lawmakers debate whether to make the popular games legal, the companies and state Attorney General Eric Schneiderman announced Monday.

One state legislator said the agreement improves the chances that lawamkers could authorize — and tax — online daily fantasy sports games as part of the upcoming state budget.

FanDuel and DraftKings are putting on hold their fight with Schneiderman — who has called daily fantasy sports illegal gambling and is trying to shut them down — until after lawmakers close the 2016 legislative session. If Gov. Andrew M. Cuomo and lawmakers don’t act by June 30 to legalize the games, the litigation will resume, according to an agreement the sides released Monday. All court dates were postponed till September.

“I’m pleased to announce that both FanDuel and DraftKings will stop taking bets in New York State, consistent with New York State law and the cease-and-desist orders my office issued at the outset of this matter,” Schneiderman said in a statement. “Today’s agreement also creates an expedited path to resolve this litigation.”

If lawmakers do reach a deal to legalize the games in New York, the companies could resume operations here as soon as July 1.

Several legislators have introduced bills to make clear that daily fantasy sports are legal, including Assemb. Dean Murray (R-East Patchogue).

With the litigation now on hold, Sen. John Bonacic (R-Mt. Hope) said there’s a “strong possibility” lawmakers might insert language in the budget (due April 1) to make online daily fantasy sports legal. He said Cuomo staff have been asking about revenue projections. Bonacic favors charging companies $500,000 to operate in New York and taxing them 15 percent of their gross profits in the state.

The attorney general sued Boston-based DraftKings and New York-based FanDuel last fall. He accused them of being games of chance, not skill, and therefore in violation of state gambling laws. A judge granted an injunction halting the companies’ operations, but an appellate court lifted it, allowing them to continue.

Schneiderman, a Democrat, noted that even if lawmakers expressly make daily fantasy sports games legal, he will continue to pursue false advertising claims against the two companies.

At a news conference following the announcment of the agreement, Schneiderman deflected questions about possible legislation, noting his office defends any laws legislators enact.

FanDuel said “New York is a critical state” for its business and the decision to halt business here was “disheartening,” but was in the “best interest of our company, the fantasy industry and our players while we continue to pursue legal clarity in New York.”

In a statement, DraftKings said: “We will continue to work with state lawmakers to enact fantasy sports legislation so that New Yorkers can play the fantasy games they love.”

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