Fantasy sports companies contend that their games are not gambling because they involve more skill than luck and were legally sanctioned by a 2006 federal law that exempted fantasy sports from a prohibition against processing online financial wagering. That view is being challenged as fantasy sites have begun offering million-dollar prizes and bets on individual sports, such as golf, mixed martial arts and Nascar races, magnifying the element of chance and making the exemption more difficult to defend.
On Tuesday afternoon, as news of the attorney general's order began to trickle out, DraftKings sent an email to its players, saying, "Attorney General Eric Schneiderman is considering preventing New Yorkers from playing daily fantasy sports," and added: "Hey, New York, protect your right to keep playing daily fantasy sports. Contact the attorney general today!"
Sabrina Macias, a spokeswoman for DraftKings, said, "We're disappointed he hasn't taken the time to meet with us or ask any questions about our business model before his opinion." She said there were more than 500,000 daily fantasy sports users in New York State.
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Eric Soufer, a spokesman for the attorney general, disputed Ms. Macias's account, and said the attorney general's office had multiple meetings with representatives from DraftKings before issuing the order.
In response to the letter it received from the attorney general, DraftKings said, "We strongly disagree with the reasoning in his opinion and will examine and vigorously pursue all legal options available."
In a statement, FanDuel said: "Fantasy sports is a game of skill and legal under New York state law. This is a politician telling hundreds of thousands of New Yorkers they are not allowed to play a game they love and share with friends, family, co-workers and players across the country."
The two companies can challenge the attorney general's order in court. According to Joseph M. Kelly, a professor of business law at the State University College at Buffalo, the state would have to prove that chance is a material factor in fantasy sports, which would make it gambling.
Players who bet on fantasy sports assemble their own teams of professional athletes who compete based on their statistical performances in games. Mr. Schneiderman's order does not apply to seasonal competitions or to other companies that offer fantasy games.