DraftKings and FanDuel will stop running paid contests in New York amid an ongoing fight to operate in the key market.
New York Attorney General Eric Schneiderman has sought to shut down the companies' operations since last year, when he issued a cease-and-desist order, arguing their contests rely on chance and are illegal under state law. DraftKings and FanDuel have stressed their contests require skill, and they were previously allowed to operate while they appealed the injunction.
"As I've said from the start, my job is to enforce the law, and starting today, DraftKings and FanDuel will abide by it. Today's agreement also creates an expedited path to resolve this litigation should that law change or upon a decision by the appellate division," Schneiderman said in a statement.
Under the New York agreement, DraftKings and FanDuel will stop paid contests and delay an appeal until September. However, if state lawmakers pass legislation explicitly allowing and regulating paid daily fantasy sports, the state's gambling claims will end.