October 12, 2016
Last week, a group of New York citizens filed a lawsuit against Governor Andrew Cuomo and the New York State Gaming Commission in an effort to halt implementation of New York’s new fantasy sports law. Wielding as a cudgel the arguments made by Attorney General Eric Schneiderman in a prior lawsuit against FanDuel and DraftKings, the plaintiffs are seeking to have the fantasy sports law declared unconstitutional.
What is the nature of the fantasy sports law constitutionality argument?
The constitutionality challenge primarily consists of the following:
- That fantasy sports contests authorized under New York’s law meet all of the basic criteria typically found in illegal games of chance including, among other things, the placing of bets (i.e. entry fees) on an uncertain outcome;
- That the New York State Constitution contains an explicit prohibition against gambling that can only be amended by public referendum, not legislative effort;
- Plaintiffs argue that the “skill” versus “chance” findings present a false dichotomy aimed at circumventing clear prohibitions against gambling contained in the State Constitution;
- That New York’s law sanctioning fantasy sports contests violates the federal Professional and Amateur Sports Protection Act, which makes it unlawful for, among other things, “a governmental entity to sponsor, operate, advertise, promote, license, or authorize by law or compact . . .” sports betting.
Keep Your Fantasy Sports Venture Compliant
Fantasy sports contests and the laws and regulations that govern them, continue to grow and evolve. Between court challenges to newly enacted legislation, conflicting opinions from attorneys general and various legislative efforts across the country affecting the industry, it is clear that the legal landscape of the fantasy sports space is far from settled. Against this backdrop, it remains imperative to engage competent legal counsel to become/remain compliant with applicable law when setting up or operating fantasy sports contests.
If you are interested in learning more about this topic or pursuing a fantasy sports venture, please e-mail us at info@kleinmoynihan.com, or call us at (212) 246-0900.
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