The Legal Battle Over Daily Fantasy Sports In New York Is Finally Over

Written By Derek Helling on March 23, 2022 - Last Updated on June 8, 2022
New York And The Battle To Legalize Daily Fantasy Sports Is Finally Over

In the eyes of the state of New York, daily fantasy sports contests are not gambling. The final ruling in a New York DFS lawsuit that has created doubt about the games’ legality in the state is over.

The NY Court of Appeals released its decision on Tuesday. Although it was close, the ruling upholding a 2016 law means New Yorkers on DFS platforms can continue to play the games for real money.

The final word on the New York DFS lawsuit

The seven-member court issued its 58-page majority opinion this morning, overturning a lower court’s ruling. The lower court had ruled that DFS contests are games of chance instead of skill. That’s a crucial distinction.

The constitution says that the only way to expand New York gambling is via a constitutional amendment. Thus, if DFS is gambling, the legislature had no authority to regulate DFS on its own in 2016.

Had the majority opinion gone the other way, DFS platforms like DraftKings and FanDuel probably would have had to only offer free-to-play games in NY for the foreseeable future. The state would have had to go through the process of amending the constitution to allow for regulated DFS.

Now that’s unnecessary. However, it almost wasn’t.

DFS ruling came by slimmest of margins for New York

As expected, the result was narrow. During the hearing in February, it seemed that there was room for a 4-3 decision one way or the other. Judge Hector LaSalle was a potential “swing vote.”

Three of the seven justices did end up agreeing with the lower court that paid DFS games constituted gambling. LaSalle came down on the opposite side, though, making the majority those who voted to overturn the lower court ruling.

The opinion basically stated that the justices felt the plaintiffs failed in their responsibility to prove that the 2016 law violated the state’s constitution. Additionally, the justices believed skill, not chance, was the predominant factor in winning money playing DFS.

A spokesperson for DraftKings said,

“We are pleased with the Court’s decision, which ensures New Yorkers can continue to enjoy DraftKings’ industry-leading fantasy sports product.”

FanDuel echoed that, saying,

“New York state is FanDuel’s home and our New York customers have enjoyed playing daily fantasy for years. We are pleased that New Yorkers will continue to have access to fantasy sports contests.”

New Yorkers might wonder whether this means the legislature now has more authority to make decisions on gambling expansion. This ruling doesn’t teeter on granting new power to the legislature, though.

New York gambling legislative process remains identical

This court case wasn’t about whether the New York legislature could create new forms of gambling on its own. The matter in question is whether DFS constituted gambling. The state’s court system has now weighed in on that issue definitively.

Adding more types of gambling in the future will still have to go through the state’s constitution. Because many of the existing forms are already there in a 2013 amendment, though, there isn’t much to do in that regard.

For example, an existing attempt to legalize NY online casinos and online poker falls under the provisions of that 2013 amendment. Poker, slots, and table games are all part of that framework.

The bill is simply adding online platforms on servers located at the state’s commercial casinos to the list of places where those games can be played. While those bills might not become law this year, it seems a strong likelihood for the near future.

Unless the legislature takes another action in the future to repeal the current law, playing DFS for money in New York is now indisputably legal. It only took the better part of six years to reach that conclusion.

Photo by Charles Krupa / Associated Press
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Derek Helling

Derek Helling is a lead writer for PlayUSA. Helling focuses on breaking news, including legislation and litigation in the gaming industry. He enjoys reading hundreds of pages of a gambling bill or lawsuit for his audience. Helling completed his journalism degree at the University of Iowa.

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