New York Attorney General Eric Schneiderman issued a cease-and-desist order to daily fantasy sports betting companies FanDuel and DraftKings late Tuesday afternoon.
Schneiderman's position is that FanDuel and DraftKings' games are considered illegal gambling.
The fantasy sports betting sites argue that their businesses received a clear exemption through a section of the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA), which referred to fantasy sports betting as a game of skill as opposed to one of chance.
Both FanDuel and DraftKings have since emailed and released statements to their massive player bases urging New York players to contest this decision by contacting the Attorney General.
A spokeswoman for DraftKings said that the company has 500,000 registered players from New York, as reported by the NY Times.
Sportsbook Review was able to successfully create a test account registered to NY at DraftKings, who will likely challenge the order in NY federal court. Nevada also banned fantasy sports betting operators last month.
Fantasy Sports Betting Scandal
The companies came under hot water after a scathing report which suggested possible insider trading, following DraftKings employee Ethan Haskell winning $350,000 at rival company FanDuel, which prompted the inquiry by Schneiderman.
Haskell, a mid-level content manager, allegedly possessed information that could have helped him gain an unfair competitive edge, though this was shot down by DraftKings.
The ensuing drama forced both fantasy sports betting companies to bar their employees from playing with fantasy sports sites. Sportsbook Review covered why bookies betting with other sportsbooks differs from the fantasy sports betting scandal.
As for the debate of traditional sports betting vs. fantasy sports betting, NJ State Senator Raymond Lesniak [who is a proponent of sports betting in Atlantic City] touched on the hypocrisy of how each are treated under federal law: "It's a distinction without a difference," said Lesniak when interviewed by SBR's Natalie Rydstrom last month.