New York AG wants Draftkings to return money & pay a massive fine | DFS is DOA

Another nail in the coffin of daily fantasy sports in New York.

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New York Attorney General Eric Schneiderman is no longer seeking only to shut down daily fantasy sports companies DraftKings and FanDuel in the state. In amended complaints filed Thursday, he now seeks restitution and damages for what he has said constitutes illegal gambling operations.

The latest filing comes as a panel of appellate judges will decide to lift or extend a temporary stay granted last month after the New York Supreme Court granted a preliminary injunction. The companies will file briefs regarding the stay on Monday.

In the amended complaint, Schneiderman seeks damages, including pre-judgement interest, caused “by the fraudulent and deceptive acts and the repeated fraudulent acts and persistent illegality” of the companies’ business. He also seeks restitution to New York customers and a civil penalty up to $5,000 for each violation of general business law.

“The AG’s goal here is to extract every ill-gotten dollar from DraftKings and FanDuel’s New York contests, and then some,” said Daniel Wallach, a sports and gaming law expert at Becker & Poliakoff in Florida.

The companies have appealed Justice Manuel Mendez’s Dec. 11 decision to grant a preliminary injunction, which the Appellate Division of the State Supreme Court will hear while the case regarding the companies’ legality continues in the New York Supreme Court.
Schneiderman’s choice to file the amended complaint now won’t have bearing on the appellate court’s decision on the temporary stay, Wallach said.

The DFS companies must convince the appellate panel that they are likely to be successful on the appeal of the preliminary injunction and that they would suffer irreparable harm in not being able to operate in New York while the case is ongoing.

 

They filed a lawsuit in Illinois on Christmas Eve after Attorney General Lisa Madigan ruled them to be illegal in that state, mirroring the course of events in New York.

DraftKings and FanDuel sued Schneiderman in November after he issued a cease-and-desist letter earlier that month. The attorney general responded with a lawsuit. Mendez ruled on the preliminary injunction after a Nov. 25 hearing on the matter.

Both companies have been engulfed in a storm of legal controversy since October, with more than four dozen lawsuits filed by consumers. Illinois joins New York and Nevada in determining that companies offer gambling contests that should be regulated or banned.

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