NY top court: Daily fantasy sports are legal

ALBANY — New York’s top court ruled Tuesday that daily fantasy sports are legal in the state and do not violate a state constitutional ban on gambling because they primarily are games of skill, not chance.

The Court of Appeals ruled in favor of daily fantasy sports in a 4-3 decision.

The ruling would have had far greater impact had the court upended daily fantasy sports. That potentially could have undermined the legal basis for online sports betting in New York, an expert said.

“If the court had gone the other way, a lot of the [legal] structure for mobile sports wagering … would be subject to a strong challenge,” said Karl Sleight, an attorney who heads the gambling practice at Harris Beach, a prominent lobbying firm.

Such a decision would have thrown into doubt ongoing efforts to introduce more forms of gambling, such as online poker, Sleight said.

In the ruling, the high court reversed a midlevel court, which had said daily fantasy sports, or interactive fantasy sports as it's called in state law, violated the state's 1894 constitutional ban on gambling.

Chief Judge Janet DiFiore, writing for the majority, said the court should give great deference to the State Legislature and former Gov. Andrew M. Cuomo, who approved a 2016 law to permit interactive fantasy sports.

“Judges may not arbitrarily supplant the legislature’s reasoned determinations with their own judgments or notions of common sense under the guise of constitutional interpretation,” DiFiore wrote.

“It has been our repeated admonition, in light of our obligation to respect the powers of a coequal branch of government, that ‘legislation should not be declared unconstitutional unless it clearly appears to be so’ and that ‘all doubts should be resolved in favor of the constitutionality of an act,’” DiFiore said.

DiFiore noted also noted that multiple other states have legalized the business.

“After careful consideration, the New York State Legislature reasonably concluded — as have many other state legislatures … that IFS contests are neither games of chance, nor bets or wagers on sporting events but, rather are independent contests of skill over which the participants exert influence,” DiFiore wrote.

Lawmakers who support interactive fantasy sports have called it a game of skill because players select a team of real-life athletes whose statistics are counted over the course of a day or a season to determine winners.

DiFiore agreed it’s a game of skill that doesn’t violate the constitutional ban on gambling.

The ban has become severely watered down over the past three decades with the opening of video slot machine parlors and more than 10 casinos, along with state approval of online sports betting.

Judge Rowan Wilson, writing for the three dissenting judges, said the majority ignored what is plainly obvious: “Everyone knows that sports betting is gambling.”

Wilson said the majority’s “explanation of why something everyone knows is gambling is not actually gambling brings to mind a brief exchange in 'Casablanca' " in which Captain Renault declares he is "shocked, shocked" to find gambling is going on, all while pocketing a share of the loot, referring to the 1942 film starring Humphrey Bogart and Ingrid Bergman.

By Yancey Roy

yancey.roy@newsday.com@yanceyroy