FanDuel Defends Business In New York, Hints At Abuse Of Power By Attorney General

Earlier this week, the state of New York banned FanDuel and DraftKings from accepting further deposits from clients in the state.

New York's Attorney General Eric Schneiderman responded that the companies are running a gambling website.

"Daily fantasy sports is neither victimless nor harmless, and it is clear that DraftKings and FanDuel are the leaders of a massive, multi-billion-dollar scheme intended to evade the law and fleece sports fans across the country," Schneiderman wrote in a cease and desist letter obtained by The New York Times. "Today we have sent a clear message: not in New York, and not on my watch."

Related Link: FanDuel, DraftKings Are Banned In New York: Here's A List Of Equity Investors That May Be Affected

How Significant Is New York?

According to Bloomberg, New York residents account for 13 percent of the total U.S. fantasy sports market. DraftKings and FanDuel are projected to lose a combined $35 billion in revenue, as it is no longer permitted to accept money in the state.

The attorney general's office also contacted DraftKings' business partners, threatening them with legal action unless they "immediately ceased performing services for DraftKings in New York."

Newest Developments

On Friday, CNBC tweeted that Schneiderman's office issued a statement, confirming that a cease and desist letter has been sent to both DraftKings and FanDuel to stop both sites from violating state law. The attorney general's office will also "take action to enforce" laws that are being breached.

Bloomberg also stated that FanDuel responded to the allegations, noting that it's site is "skills" based and doesn't constitute gambling, as winners are those "whose fantasy teams perform best." The company also suggested that Schneiderman is engaged in bullying activities, abusing his powers and "telling hundreds of thousands of New Yorkers they are not allowed to play a game they love."