New York Court of Appeals to Decide if Daily Fantasy Sports is Gambling

Posted on: October 6, 2021, 06:07h. 

Last updated on: October 7, 2021, 10:16h.

Philip Conneller @casinoorgphilc Read More
Expertise: Gaming Business, Regulation, Tribal Gaming.

The New York Court of Appeals is set to determine whether daily fantasy sports is a game of skill or a game of chance.

New York DFS
The Hon. Eugene Fahey, pictured in the New York Court of Appeals, queried the essential difference between DFS and sports betting Tuesday. (Image: Buffalo News)

Spectrum News 1 reports that the state’s highest court began hearing arguments in Albany on Tuesday. Ultimately, the court will decide once and for all whether the New York State Legislature overstepped its remit when it legalized the contests in 2016.

The 2016 law offered DFS companies a carve-out from state gambling laws. That’s under the premise that they were games of skill. But anti-gambling groups sued, arguing the law was unconstitutional.

Sports Betting Complication 

The state’s constitution bans gambling unless an exception can be made via a constitutional amendment, which must be agreed upon by a public referendum.

New York residents voted to legalize sports betting in 2013, for example, at the same time they approved casino gaming. But it was only after the US Supreme Court tossed the federal ban on sports betting that the state’s casinos were permitted to offer these kinds of wagers.

So far, the trial court has ruled that the 2016 law violates the state’s ban on gambling. But it held that the legislature was in its power to decriminalize the contests.

That’s why sites have been able to continue offering DFS in New York pending the resolution of litigation, albeit without oversight from the state. But should the Court of Appeals rule against the state, it would be curtains for the contests in DraftKings’ and FanDuel’s second-biggest DFS market.

Betting on the Bills

On Tuesday, New York Assistant Solicitor General Victor Paladino argued that DFS contains elements of chance, but that skilled players with more knowledge come out on top.

“The contestants have available to them a wealth of information, much like the analytics available to the general managers of the world,” Paladino said during oral arguments, as reported by Spectrum News 1.

You’re arguing that I cannot place a bet on whether the Buffalo Bills win their next game, but I can place a bet on whether or not their lead receiver Stefon Diggs catches the ball ten times or six times,” asked the judge, the Hon. Eugene Fahey.

Since Fahey can legally bet on the Buffalo Bills in New York casinos, it must be assumed he is talking specifically about mobile bets, which are not yet licensed in New York.

Meanwhile, the plaintiffs argued that DFS is gambling, pure and simple.

“I really, frankly, think what the Legislature has done here is bend over backward to find some kind of way to circumvent that,” said the plaintiffs’ attorney Cornelius Murray.

The court typically hands down its decisions six to eight weeks after hearing oral arguments.