Daily fantasy sports sites DraftKings and FanDuel are now legal again in New York state. The websites are at the center of an ongoing tussle on whether or not betting on the fortunes of hand-picked imaginary sports teams constitutes gambling. On Wednesday, New York's governor Andrew Cuomo signed legislation saying it's all, officially, a bit of fun: these are "games of skill." This means the sites now come under the jurisdiction of the New York State Gaming Commission, which will introduce regulations protecting consumers' rights, as well as levying new fees from the sites to be paid to the state.
"Daily fantasy sports have proven to be popular in New York, but until now have operated with no supervision and no protections for players," said Governor Cuomo in a press statement. "This legislation strikes the right balance that allows this activity to continue with oversight from state regulators, new consumer protections, and more funding for education." It's estimated that the new legislation will generate $4 million in revenue for the state, which will be used to fund education initiatives.
These sites are now legal in New York State — but nationwide it's a varied outlook
DraftKings and FanDuel were originally banned in New York state back in March, with State Attorney General Eric Schneiderman ruling that wagering money on real-life sporting outcomes (the teams are fake, but the players are real) constitutes illegal online gambling. DraftKings and FanDuel's response has been that there's a great deal of skill involved in picking the right players, and it's this position that Cuomo agrees with. Across the US, though, there's no definitive ruling, and the legal status of various daily fantasy sites varies from state to state.
But it's not a clean sweep for the daily fantasy sites, and both DraftKings and FanDuel still face dozens of class action lawsuits across the US, and are sinking an increasing percentage of their revenue into legal battles. Schneiderman's office made it clear that the sites weren't off the hook, and said it would continue to pursue "false advertising and consumer fraud claims for past misconduct" related to their businesses. FanDuel’s chief executive, Nigel Eccles, said that the company's future is "bright" following this week's ruling, but the success of daily fantasy sites is still a bit of a gamble.