The student news site of Bernards High School

The Crimson

The student news site of Bernards High School

The Crimson

The student news site of Bernards High School

The Crimson

Daily fantasy sports sites DraftKings, FanDuel deemed illegal by New York state officials

DraftKings & FanDuels logos
DraftKings & FanDuel’s logos

“It is clear that DraftKings & FanDuel are the leaders of a massive, multibillion-dollar scheme intended to evade the law and fleece sports fans across the country, today we have sent a clear message: not in New York, and not on my watch.” The New York State attorney general Eric T. Schneiderman made this statement on November 10th, effectively disallowing these two multi-billion dollar websites from taking bets from New York residents, which is a huge blow considering there are more than 500,000 daily fantasy users from New York State. As a result, FanDuel announced  that for this week they will not take bets from New York residents, which accounts for approximately ten percent of their players. “FanDuel has always complied with state and federal law and we are going to continue to fight to ensure millions of New Yorkers have the right to play the fantasy sports games they love,” the company said in a statement. After making this statement, they made it clear that they hope to allow bets again next week.

Unfortunately for these companies, this is not the first or the last blow to their industry. On October 15, Nevada ruled that in order to continue taking bets from their state, they must first get a state gambling license. There are even states where FanDuel and DraftKings do not offer their services because they feel it is too risky to allow residents to use their services. Among these five states is Washington, where they have some of the strictest gambling laws in the country. Although two bills just passed through the House and the Senate ruling fantasy sports as games of skill, there is still controversy nationwide about the “luck” that is involved.

There are also other factors of these sites that make them technically illegal in the eyes of the law.  One of the main factors making these sites illegal gambling is the fact that they make a profit. According to the law, the house can not make a profit off of any bets placed. They charge entry fees in games ranging anywhere from $0.25 up to $5000, with hundreds of thousands of people joining some games. But how do they make profit?

They make profit because they have set winnings, which do not fluctuate depending on the amount of people who join. If 500,000 people join a lobby with a $20 buy in and only $7,000,000 of total prizes, then they making a $3,000,000 profit on just that game alone. In order for that game to be considered legal, the winnings would have to rise and fall along with the amount of people that join that game. This means that in that same lobby with the $20 buy in would have to have $10,000,000 of total winnings in order to be considered legal.

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