Following five years of litigation, the New York State Court of Appeals has ruled that Daily Fantasy Sports (DFS) are constitutional, overturning two lower court decisions to the contrary.
The court ruled by a vote of 4-3 that DFS contests were games of skill as opposed to chance and therefore not subject to legal prohibitions on games of chance in the state’s legal code.
The DFS constitutionality case dates back to 2016 when a lawsuit ruled that DFS contests were “lawful skill-based competitions for prizes under our precedent.” However, as the state moved to legalize this form of gambling and open a regulated market, legal challenges brought the matter to two lower courts. This resulted in two decisions ruling against DFS operations in New York deeming them an unconstitutional practice.
The Court of Appeals ruling on Tuesday, March 22nd brings the matter to its final conclusion. DFS operators were allowed to run contests throughout the appeals process so there is little change to daily operations.
In the Court’s final decision, Chief Judge Janet DiFiore for the majority wrote:
“Evidence presented to the legislature indicated that outcomes in (Interactive Fantasy Sports) contests are predominantly based on skill. Studies showed that skilled players achieve significantly more success in IFS contests and that rosters of skilled human players were more successful in IFS contests than randomly generated lineups over 80% of the time.”
State Senate Gaming Committee Chair Joe Addabbo spoke out in favor of the ruling. He feels that revenues for DFS contests will increase now as companies can invest in the market knowing that their operations can no longer be paused without warning. Addabbo said:
“They didn’t know whether to advertise, market more money, invest more money in marketing. The New Yorkers I spoke to were a little apprehensive about what’s going on. You know, can we, can’t we? They’ve seen the proliferation of ads for mobile sports betting but they saw no ads anymore for fantasy sports.”
Several other states, including Louisiana and Florida, have recently come through constitutional challenges to their Daily Fantasy Sports laws unscathed.
The news comes as sports betting in New York continues to gather pace following the legalization and subsequent launch of mobile sports betting. In their first three weeks of online sports betting operations, mobile and retail sportsbooks combined to set an all-time monthly record for the USA, accepting over $1.68 billion in wagers.
The state has also made moves to establish a regulated online casino market with two bills introduced in both chambers of government.
Ciaran has been working within the Gambling Industry as a deep analyst since 2019. His deep knowledge and understanding of all the gambling regulations, and processes makes him a true asset, and an always valuable point of view for Gambling Industry News, allowing us to cover every topics from a brand new perspective.