NY Attorney General Tells Daily Fantasy Sports to Stop Taking Bets in the State | Hacker News Reader

NY Attorney General Tells Daily Fantasy Sports to Stop Taking Bets in the State

nytimes.com

62 pointsAmorymeltzer66 comments

That brings the list of states with outright bans to Arizona, Iowa, Louisiana, Montana, Nevada, New York, and Washington. That is a rather diverse set of states that probably wouldn't appear together on many other lists. By my rough math, they also amounts to roughly 15% of the US population that DraftKings and FanDuel are unable to accept money from. These companies have to be in full crisis mode at this point and it is hard to imagine they exist in the same form a year from now without some major reform.

This isn't really an outright ban. More like, the NY government thinks it's illegal. In order to actually stop them, the government has to prove it is illegal in court. My guess is that a these companies will stand and fight. If they let NY shut them down, they are done.

IANAL and could be completely wrong on this, but I thought a judge would have to issue a temporary stay for them to continue without the threat of some sort of retroactive penalty for violating the cease and desist.

I am lawyer but I'm not sure how the specific laws work. But generally, yes, if a court eventually says that they were breaking the law the entire time they would have retroactive damages. However, I don't think those retroactive damages would stop at the date the AG sent the letter. I think it would go back to when they started to the illegal activity or the statute of limitations.

But maybe NY has some sort of notice rule for this sort of thing.

Interesting, that does make sense from a legal perspective. If you do something illegal you shouldn't need a letter from the Attorney General to tell you it was illegal before you could be punished. Although I imagine that the level of cooperation these companies provide would have some impact on any potential punishment if it were to come to that.

Yes, often the company will negotiate with the AG's office on a settlement. Being cooperative goes a long way.

The letter threatens criminal prosecution as well as civil litigation. If the companies continued while awaiting a ruling they risk company destroying criminal penalties (under the state's RICO analog) and the executives risk going to prison.

Sure, that could have happened even without a letter, but ignoring it is daring them to do it.

NYAG is mostly in the business of shaking companies down but not killing the golden goose. Presumably this is an opening salvo that will end in them making some token changes to their business to be declared in compliance with the law and paying out a large settlement in lieu of prosecution for their previous activities.

This function of the office was perfected by Spitzer but it's been cheerfully carried on by his successors.

As a New York resident, the state embarrasses me regularly in terms of the amount of personal liberty the politicians are willing to trample. Between Senator Schumer, Attorney General Schneiderman and New York Mayor DeBlasio, I honestly don't know who is the worst.

Schumer's ban requests include powdered caffeine [0], certain flavors of e-cigarettes [1] to Bitcoin [2].

Schniederman strikes me as someone more interested in extorting companies. His most recent subpoena Exxon for not speaking out about climate change to their investors (??) is his most recent campaign [3]. I'm guessing he wants to buy more iPads for the police department [4]

DeBlasio has an axe to grind against Uber [5] and costumed characters in Time Square [6] .

What a joke that this qualifies as progress.

Sorry, rant over.

[0] http://www.schumer.senate.gov/newsroom/press-releases/follow...

[1] http://www.nbcnewyork.com/news/local/Schumer-Calls-for-FDA-B...

[2] http://www.forbes.com/sites/andygreenberg/2014/02/26/senator...

[3] http://www.bloombergview.com/articles/2015-11-10/schneiderma...

[4] http://blogs.wsj.com/metropolis/2015/05/01/french-bank-settl...

[5] http://www.nytimes.com/2015/07/23/nyregion/de-blasio-adminis...

[6] http://www1.nyc.gov/office-of-the-mayor/news/570-15/mayor-de...

And I am surprised that NY people vote for these kind of scums again and again.

Why should normal bookies be prosecuted and jailed when a big corporate entity flaunts their lawbreaking?

Doing something on the internet shouldn't be carte Blanche for breaking any law deemed inconvenient.

If a law is unjust, a man is not only right to disobey it, he is obligated to do so.

Also, big corporate entity doesn't use violence.

I guess I've heard it all now... A moral crusade to allow sports betting.

Well millions of Americans are made criminals by these types of laws. Estimated $10 billion a year are bet on Super Bowl and another $12 billion on NCAA tournament. But who cares, let's turn a blind eye to that. By driving it underground, the participants can't rely on rule of law to enforce contracts and it is instead is enforced by violence.

But who cares about that? Just as long as you can make a snide remark about an activity that may not affect you.

Because if you don't care about a certain topic, nobody should care about it, right?

I hope you aren't being serious.

It's also ironic that you deride a moral argument for sports betting, considering that the only legitimate argument AGAINST sports betting (and gambling in general) is the moral one.

Not at all.

But don't pretend that playing a fantasy football pool is some sort of act of civil disobedience. It's just another impulsive act that happens to be illegal.

There are many arguments against sports betting. It corrupts the sport and is fundamentally exploitive of those who lack the ability to control their impulses. As I said before, it's illegal in New York, and the owners of these sites should be prosecuted criminally, just as any other pool organizer who attracted police attention would. We're all supposed to be equal under the law.

Your point is well made, but to paraphrase Chris Christie during the last GOP debate, "who fucking cares about sports betting?"

I mean, I hope you're also in favor harsh penalties for recreational drug use, for consistency's sake.

Again you're absolutely right about equality under the law. But as with many things in our spectator society, the Fantasy sports betting thing is just a proxy war. The true war is freedom to piss away time and money online betting on a stupid football game. It's unfortunate that so many lives are ruined by gambling and also unfortunate that I have to endure hearing my coworkers and friends blabber about QB ratings and stupid shit like that.

But allowing the government to curb yet another aspect of our online life is setting a bad precedent (go ahead, say "b-but what about pedophilia?").

How much of your net worth is tied up with FanDuel/DraftKings?

That's a form of personal attack that isn't allowed here, so please don't address other users this way.

Because the alternative to DeBlasio on the Democratic ticket was Christine Quinne, Bill Thomson, John Liu and others.

Bill Thomson spent the time between the 09 and 13 election working for an investment firm, and given the attitude towards politicians owned by banks, failed to gain the nomination.

Christine Quinne worked with Bloomberg to overturn 2-year term limits on elected officials, and ran a secret slush fund while she was on the city council.

Anthony Weiner, well. Was Anthony Weiner.

Randy Credico ran a very lackluster campaign.

While John Liu had a solid platform, his campaign became embroiled in financial scandal.

On the other side of the aisle, we had John Catsimatidis and Joe Lhota (George MacDonald ran a campaign as well, but was barely known).

Catsimatidis unabashedly supported the wildly unpopular stop & frisk tactics, which were (and still are) wildly unpopular.

Lhota was in favor of charter schools instead of fixing our crumbling public schools (DeBlasio's plans for public schools end up actually working, unlike charter schools); his mixture of fiscal conservativeness and socially liberal policies like choice & equal rights turned off the Republican vote - he only garnered a little more than 20% of the vote.

So it was between DeBlasio and Lhota. DeBlasio spoke to his base and Democrats actually liked him. Lhota alienated his base and Republicans hated him (and so did Democrats).

We get crap politicians because crap candidates run. Just like every fucking where else. Why do we get crap candidates? Because money.

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Yeah, the e-cig stuff is stupid. Yeah, the campaign against topless panhandlers in times square is pretty stupid. The campaign against uber makes sense, if you're not a proponent of neo-feudalism.

Schneiderman's v. Exxon stuff is actually kind of interesting. It's not that he's alleging that they failed to disclose climate change to their investors - you're mincing words, and it's pretty fucking obvious. They failed to inform their investors of studies that could pose change to their future profits. Shaky, sure, but not entirely insane. He's not anti-business, he's anti business that's fucking us over. Keep in mind that Exxon (formerly Standard Oil) was responsible for one of the largest oil spills on US soil - right here in Brooklyn.

Do you really believe that it's about Exxon's investors? I imagine the proceeds from whatever settlement would go to those affected, according to your description, the shareholders who's future profit's will be hurt from withholding their studies?

You can sue for oil spills. You can put in a gas tax. But what's Schniderman is doing is a shake-down, led by populism. I get it, no one likes Exxon (me included) and my opinions may not be popular. But these lawsuits are a new form of hidden tax paid by shareholders, not some mythical corporate entity. He even went after an English bank (Barclays) for something to do with their dark pool. It doesn't go to those harmed by the actions. You can read about where the money goes. It goes to government agencies, and yes, iPads for the police. It's fine if politicians think there are worthy programs they want to fund, but this isn't rule of law.

http://dealbook.nytimes.com/2013/11/20/where-does-jpmorgans-...

Nevada isn't banning them. It's requiring that they apply for a gambling license.

Welcome to the online poker world ~4 years ago. The only difference (and the question is, 'will this be enough to keep it alive?') is that DFS has the backing of sports leagues (MLB, NFL) that have big lobby groups who can "influence" politicians. Doesn't matter how much money you have if you don't have this influence.

IANAL so correct me if I'm wrong, but assuming DFS sites challenges citing that banks can legally take their transactions (through the UIGEA and thus, "not gambling"), wouldn't NY need to pass a law to bar DFS in the state?

Poker was a little different. They were violating some major banking laws with how they were doing deposits. Also the companies were overseas...

This decision baffles me.

What possible benefit to New Yorkers is there to not allow them to take bets, if things like state lotteries are still legal?

We let people drink and smoke but people can't enjoy putting money on fantasy sports.

I'm not in the state, but I'd consider myself a power user of those sites, so perhaps I'm only disappointed that alot of easy money just left the system.

If these sites didn't have the people(NFL and Jerry Jones) and money(see people) behind them that they do, I'd be a bit more worried about their future.

Is this just some state's working on an endgame to be able to tax fantasy sports revenue that comes from their states?

This is the same state that outlawed pinball until someone proved that it was a game of skill.

http://www.slate.com/blogs/atlas_obscura/2015/05/29/pinball_...

That's it, its time I took this into my own hands, and went on a major winning spree to prove that fantasy football and hockey are really games of skill and not chance:)

Is it about that specifically, or is it that the states are forcing these websites to play by the same rules as everyone else? Ignoring laws that everyone else has to play by is something that has worked so far for Airbnb and Uber but apparently something like gambling is a bit more clear cut.

The two aren't mutually exclusive. If they are just forcing them to "play by the same rules", Chollida's question just becomes "why are the rules in the state stacked against gambling?", with the rest of the question unchanged.

It's perfectly possible to fairly enforce unfair (and/or fair but counterproductive) rules, but that on its own doesn't justify it. Viewed this way, these companies are then just engaging in something like constructive noncompliance.

That is an entirely different question, but the answer probably isn't that anyone can ignore inconvenient laws under the guise of "It's unjust"

Your question reduces to: why is gambling illegal? And the answer is that lots of people don't like it, and people are entitled to make things they don't like illegal.

A recent poll found that 55% of people think sports betting should be legal, while 33% think it should be illegal: https://www13.shu.edu/academics/business/sports-polling/uplo.... But if you read closely, support drops off dramatically in the 45+ age group, which is heavily over-represented at the polls, especially in local elections.

One study found that the median age of voters in mayoral elections in four cities was 60: http://www.knightfoundation.org/blogs/knightblog/2015/7/28/p....

> people are entitled to make things they don't like illegal

Things like gay marriage, flag burning, and atheists holding public office, right?

That known as the "tyranny of the majority" and yes it's one of those warts no one likes to credit democracy with.

Those are the exceptions that prove the rule. Only when it implicates a fundamental right will the majority be precluded from banning things they dislike.

Gambling is illegal in most places because it's an addictive behavior that causes a lot of social problems and attracts an undesirable element.

States started rolling out lotteries 50-60 years ago as a regressive tax scheme that also helped to reduce demand for illegal numbers rackets.

> What possible benefit to New Yorkers is there to not allow them to take bets, if things like state lotteries are still legal?

Just because the state lottery is legal doesn't mean anybody can go and create their own lottery. Notice how you see "no purchase necessary" on every single promotional event where you can win something?

Isn't the difference that sports betting is a game of skill and not pure chance like the lottery?

How does that make it not gambling, outside of the midnight rider on the port security bill? Wagering money on a game is gambling.

see poker. which is sometimes not gambling. but sometimes it is.

What about when a player gets injured? Isn't that pure chance?

Sure, but every player at a given position probably has an equal chance of being injured, so the real differentiator is skill in choosing the right players.

Fair question - is D&D or Diablo III a game of skill or chance? Is it legal to bet on it?

It doesn't really matter. It's not like authoritarians in the State make principled, consistent decisions, or have rules that reflect the same. FF fleeces customers but State lotteries? Crickets. The State lottery is in the constitution, so it has a magical protection spell around it. It's mostly about picking winners and losers, jumping on trends, protecting political legacies, shakedowns, etc. If D&D came under the same scrutiny, I'm sure they'd try to ban betting on it.

It'd be nice if more reporting on the subject highlighted the absurdity of DFS being legal but betting on game outcomes illegal. I think that DFS should be legal but at least the NY AG is being consistent in enforcement.

The amusing thing is that they're quoting the fact that 1% of players win most of the money and therefore DFS is gambling. I'd argue that the fact that 1% win most of the time is the strongest signal that it's a game of skill (assuming it's the same 1%).

Due to the way these are structured the main "skill", so to speak, is apparently figuring out what bets other people have made so that you can make different bets, because unpopular bets have a better expected payout than popular ones. That's why most of the profits go to industry insiders who understand what kind of players people bet on.

Given the information we have, it's certainly possible that some of that one percent used insider information.

Nevertheless, given the number of players that draft kings and fan duel have acquired through their indefatigable marketing campaigns, I would submit that a not insignificant portion (if not a majority) of that one percent figure out the bets others wouldn't make all on their own.

Further, math and computers can most certainly help with this given that all the relevant data is public.

How long 'til this goes the way of HFT in the stock market?

I'm all for this simply to get the commercials off the air. I was almost missing the constant barrage of cell phones and insurance providers.

I had the sense they knew this was coming and that's why they hit the advertising so hard. If they can get enough momentum, they can make it legal.

Hmm interesting take on things:

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“It is clear that DraftKings and FanDuel are the leaders of a massive, multibillion-dollar scheme intended to evade the law and fleece sports fans across the country,”

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Also I guess a site served from another state considered to be "in state" according to their interpretation. I wonder if these sites can tacitly (hint, hint, wink, wink) nudge their users to put in a different state in their profiles. With a disclaimer and all or just simply make everyone pick a state but remove the states that disallow it. Let users "figure it out".

New York's state constitution bans all unauthorized gambling and restricts the types of authorized gambling to (1) the state lottery, (2) parimutuel betting on horse races, (3) bingo and raffles by charitable organizations, and (4) no more than seven casino licenses. (I remember this from when the casino amendment was proposed; I voted against it because arbitrarily limiting the number of licenses stunk of corruption. If you're going to legalize gambling just legalize it all the way.)

Without a constitutional amendment, which in New York requires the approval of two consecutive legislatures to pass, it looks like daily fantasy is dead in this state.

This chance/skill argument could be made for the financial markets.

The distinction with financial markets is that they are enablers of useful economic activity.

Years ago I worked for financial traders in Chicago, home to a lot of commodities markets. Thousands of people traded futures and options on those markets. But every winter, there was also the Chicago snow markets, where those same traders would illegally trade futures and options on how much snow would fall each month at O'Hare airport. It was illegal because it was not a CFTC-regulated market; it was just a gambling operation that happened to use financial lingo to make the best more interesting.

Interestingly, I see that decades later a legal snow market was actually launched:

http://openmarkets.cmegroup.com/4967/a-market-for-snow-how-s...

Here, though they had found a legitimate purpose: it let people with snow-related expenses insure themselves against excessive snow-related expenses.

Excellent news. These sites prey on the people who can least afford to lose and as the article noted seriously misrepresent the chances of winning. Shame on the NFL for their involvement.

What disruptive technology is disrupting is not markets, but government.

In what way is daily fantasy sports gambling "disruptive technology"?

In the $2,000,000,000/yr way and in the "Getting Disney to be part owner in a gambling site" way.

Well, there may also be the "new ways to commit insider trading" way, depending on how that story turns out.

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