The Manhattan judge who’s deciding the future of daily fantasy sports gaming in New York state wasn’t telegraphing his plays during a heated, day-long hearing Wednesday — instead seeming to side with Attorney General Schneiderman during the morning session, and with the gaming sites in the afternoon.
Then, at the conclusion of the hearing, Manhattan Supreme Court Justice Manuel Mendez continued the suspense, saying only that he would issue a written decision “soon.”
The AG is seeking the court’s permission to bar DraftKings and FanDuel from operating in New York pending an eventual, more detailed determination of whether the games constitute illegal gambling under state law.
“The court will reserve decision,” Mendez told some 100 lawyers and officials from the state and the gaming sites who packed the courtroom. “You will get my decision; it will come very soon.”
DraftKings and FanDuel say their customers are playing a game of skill that’s thereby exempt from the state’s gambling laws, which regulate games of chance.
Mendez at first sounded skeptical of that argument, at least at one point during Wednesday morning’s session of arguments.
“Fine, you have that skill” to pick a roster of players based on their abilities and track records, Mendez conceded, reiterating the two gaming sites’ arguments as he engaged a lawyer for FanDuel.
“But now you’re relying on someone else’s skill to play the game,” the judge continued. “And that’s the contingency game — how that other person performs,” he added, meaning that once a sporting event happens in real time, fantasy sports players’ fortunes are determined chance, by events outside their control.
This echoed arguments made by Schneiderman and his lawyers repeatedly in press releases and court papers from the two weeks since the AG sent the two gaming sites cease and desist letters, calling their operations illegal.
“The defendants’ contests are not a bunch of clicks of the mouse or taps of an iPhone; it’s what’s happening beyond the computer screen,” Kathleen McGee, an attorney for the AG, argued Wednesday to Mendez, referring to DraftKings and FanDuel as the defendants.
“Chance pervades daily fantasy sports,” she argued. “An athlete injury, a slump, a lucky shot, a streak, dropped pass, even the weather on any given day, especially if the game is rained out.”
“What DraftKing and FanDuel really offer is a way to bet on sports,” she added.
The response from the gaming sites, and their estimated combined 1 million fans, has also been strenuous these past two weeks.
The New York-based FanDuel and the Boston-based DraftKings say that the immensely popular contests are legal contests of skill, even if the players are contesting from their couches.
In answering the judge’s qualms Wednesday, the FanDuel lawyer, John Kiernan, argued that, “The fact that they aren’t participating in the underlying sporting events doesn’t undermine their role, that they are very active participants,”
By the afternoon, the judge pivoted, taking a turn at poking at the AG’s position.
“Why is it that traditional fantasy sports [gaming] would be allowed, whereas daily fantasy sports wouldn’t. What’s the difference? What’ s the core difference?” he asked.
The AG’s lawyer, McGee appeared to struggle to come up with a persuasive answer. Traditional fantasy sports, which is legal, is a much smaller enterprise, without the up-to-$1 million in annual winnings enjoyed by an elite few bettors, she responded.
“There’s not always an entry fee in traditional fantasy sports,” she said. “And there’s not always a prize in traditional fantasy sports. My husband plays a traditional fantasy sports game involving soccer leagues, there is no prize but bragging rights with his friends”:
Lawyers for DraftKing and FanDuel immediately seized on the “what’s the difference?” issue in their rebuttal arguments.
“They simply have not rational basis for distinguishing between these two,” meaning daily fantasy and traditional fantasy sports wagering, said David Boies, a lawyer for DraftKing.
“They cannot have it both ways,” agreed Kiernan of FanDuel. “They cannot have it that seasonal sports are lawful and not gambling, but that daily fantasy sports somehow are.”
