New York Court of Appeals to Determine if DFS is a Game of Skill or Chance, Again

• NY Court of Appeals Decides if DFS is Gambling Requiring Regulation
• New York Daily Fantasy Sports Went from Illegal in 2015 to Legal in 2016
• On Feb. 8, the NY Court of Appeals Will Reargue the DFS Case

NY Court of Appeals Decides if DFS is Gambling Requiring Regulation

Anyone who has ever assembled a winning daily fantasy sports (DFS) roster would argue that it took a great bit of skill to make that victory happen, but the New York Court of Appeals might conclude differently next month when it will decide whether DFS is a game of chance or skill.

Back in early October, the NY Court of Appeals heard arguments in White v Cuomo, a case challenging that:

…the Interactive Fantasy Sports law that authorized DFS in New York for the first time runs afoul of the New York Constitution’s ban on gambling … because the outcomes of DFS games involve a material degree of chance and cannot be authorized by mere legislation.

The New York Court of Appeals is a seven-member court, but Judge Michael Garcia was recused from this October case, and the Court, down to six votes, came to a 3-3 decision, so now they have set the case down for a future re-argument.

This gray area between luck and skill that DFS floats in is the difference between whether it is an activity that requires more regulation in the same way sports betting does, a debate in New York that dates back a half dozen years.

New York Daily Fantasy Sports Went from Illegal in 2015 to Legal in 2016

Before sports betting was legalized in the entire U.S. back in the early summer of 2018, one legal way to entice gamblers was to offer them daily fantasy sports that they could, if they choose, use real money to play, a transaction that ends up looking a whole lot like gambling.

In New York back when sports gambling was illegal, DraftKings and FanDuel offered DFS to Empire State bettors until finally in November 2015, NY Attorney General Eric Schneiderman issued a cease-and-desist order regarding DFS to the two online sportsbooks.

AG Schneiderman’s argument was that because DFS was “gambling and not skill,” it was illegal under state law, but his C&D order ended in June 2016 when the New York Senate approved legislation to legalize daily fantasy sports again.

Meanwhile, the NY Court of Appeals is gearing up to reargue the same old case.

On Feb. 8, the NY Court of Appeals Will Reargue the DFS Case

This re-argument of the DFS case is scheduled to happen on February 8, when the NY Court of Appeals will look at both sides of the argument again and determine whether DFS should be considered as gambling and be subject to the same laws and regulations as sports betting.

Whether the money spent playing DFS is technically a wager is, of course, debatable, but if it is ruled as such that could change how those DFS sportsbooks operate as well as how their profits are regulated and taxed, factors that could completely change the playing field.

New York’s online sports betting market is brand new and so far a huge success, so expect lots of shifts and changes like this DFS issue in the future and check back for all the latest news and updates on this exciting ongoing story.