Anti-Gambling Groups May Sue New York to Repeal New DFS Law

Posted on: August 16, 2016, 05:05h. 

Last updated on: August 16, 2016, 05:05h.

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Expertise: Commercial Gaming.
New York DFS Bill Unconstitutional, Says Les Bernal
Les Bernal, national director of the organization “Stop Predatory Gambling” believes that New York’s DFS regulations could be unconstitutional. (Image: video.foxbusiness.com)

New York and Massachusetts this month became the seventh and eighth states to regulate daily fantasy sports, respectively. But in New York this week the backlash came, as anti-gambling groups emerged to voice their displeasure and consider their legal options.

Many believe that in order to legalize DFS “by the book,” the State of New York should have amended its constitution. But instead, the legislature merely passed an amendment declaring the contests to be games of skill, and therefore exempt from its gambling laws.

Les Bernal, national director of Washington, DC-based Stop Predatory Gambling, told the Buffalo News that he is considering suing to have the law changed.

“There is no single act of New York State government that creates more inequality of opportunity than its sponsorship of predatory gambling,” said Bernal. “And now what state government is trying to do is force predatory gambling into every home and smart phone in the state as a result of a push by very powerful gambling interests.”

Constitutional Challenge Remains

Last week it was revealed that DFS market-leaders DraftKings and FanDuel had spent around $800,000 on lobbying for their cause in New York since last fall, at least half of that within the two months prior to the signing of the bill.

But Bernal’s point ignores the fact that many “powerful gambling interests” actually opposed New York’s DFS bill, including the New York Gaming Association, which advocates for the interests of the state’s nine racetrack casinos. It also ignores the fact that DFS had a large groundswell of grassroots support in the state from hundreds of thousands of customers.

According to the Buffalo News, Florida attorney Daniel Wallach told a group of gambling industry lawyers and executives at a conference last week that a constitutional challenge could set DFS back in New York by two years. He noted that Attorney General Eric Schneiderman has already declared the games to be unconstitutional, although the AG has said he will uphold the new law.

“Anyone investing in these businesses should really keep their hands in their pockets for the near future,” threatened Bernal, although he couldn’t say for sure that his organization, or others, would be able launch a legal challenge.

Massachusetts’ “Deeper Dive”

Meanwhile, in Massachusetts, lawmakers said this week that their work to regulate DFS had only just begun. The state has adopted regulations drawn up in November 2015 by its attorney general, Maura Healey, but the new law also establishes a nine-person commission that will be looking at creating a more robust framework of regulation, which may include licensing and taxation.

“We have dealt with the issue of legality here in the short-term,” said Representative Joseph Wagner, co-chairman of the Joint Committee on Economic Development and Emerging Technologies. “But I think there has been a sense in the legislature in each branch that we want to take a deeper dive on this.”