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DraftKings allowed to operate while fighting AG

An electronic advertisement for DraftKings hangs on Madison

An electronic advertisement for DraftKings hangs on Madison Square Garden, Wednesday, Jan. 6, 2016 in Manhattan. Photo Credit: AP / Mark Lennihan

A court has ruled that DraftKings can continue to operate daily fantasy sports games in New York while fighting Attorney General Eric Schneiderman’s lawsuit to shut it down, the company said Monday.

The Appellate Division, New York’s midlevel court, issued a stay of an injunction while the legal fight continues.

“We are pleased with the court’s ruling today,” DraftKings attorney David Boies said in a statement. “Daily Fantasy Sports contests are as legal now as they have been for the past seven years that New Yorkers have been playing them. As our litigation continues, we expect an appellate court to see what we have known since the outset: DFS is a game of knowledge and skill, one that builds community and whose competitive spirit has become important to the lives of millions of people.”

The attorney general’s office didn’t immediately comment.

Schneiderman, a Democrat, has filed a lawsuit to shut down DraftKings and FanDuel -- the two largest daily fantasy sports companies, controlling 95 percent of the market -- calling them illegal gambling operations. The companies claim they offer games of skill, not chance, and are, therefore, legal.

In December, a lower court granted an injunction request by Schneiderman to force the companies to stop operating while the lawsuit continued. The midlevel court effectively overturned that decision.

After the lawsuit began, New York-based FanDuel suspended New York residents from participating in its games, noting that the attorney general has pressured its payment processors.

Boston-based DraftKings, in contrast, successfully sought a temporary restraining order from a Massachusetts judge that prohibits payment processors from halting business with it.

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