DraftKings, FanDuel Scandal Update: Congressman Blasts New York AG Decision To Ban Fantasy Sports Bets

U.S. Rep. Chris Collins, R-N.Y., blasted New York Attorney General Eric Schneiderman’s recent decision to ban fantasy sports companies DraftKings and FanDuel from accepting bets in the state. Collins accused Schneiderman of being "singularly focused on grabbing newspaper headlines” in a news release issued Wednesday.

“In this draconian decision, Schneiderman is unilaterally denying hundreds of thousands of New Yorkers that use FanDuel and DraftKings the ability to compete in this game of skill,” Collins said in a statement, according to the news release."Instead of looking to score political points, the attorney general should be working with federal and state lawmakers to ensure laws are being followed. Instead, he’s opting for a two-minute drill. Let’s all take a timeout from government overreach and make sure we get it right."

Collins, who hails from Erie County in upstate New York, serves on the House Energy and Commerce Committee, the primary panel overseeing games of skill on the federal level. Schneiderman demanded Tuesday that DrafKings and FanDuel immediately cease providing fantasy sports services to New York residents. He alleged that the companies had facilitated illegal gambling and, “are leaders of a massive, multibillion-dollar scheme intended to evade law and fleece sports fans across the country,” Fortune reported.

The FBI and U.S. Department of Justice opened federal investigations last month after it was revealed that a DraftKings employee had divulged classified customer information while winning $350,000 from a FanDuel fantasy NFL contest, International Business Times previously reported. In October, Schneiderman opened an investigation into the companies’ dealings in-state.

Daily fantasy site operators have insisted, however, that they offer a game of skill, which makes it legal under terms of the Unlawful Internet Gambling Enforcement Act of 2006. The act prohibits financial companies from transferring money to online gambling sites, but games of skill are exempt.

A DraftKings spokesman released the following statement in response to Schneiderman’s decision:

“We believe this was a hasty and uninformed decision by the New York Attorney General. Fortunately, there is a process by which DraftKings can challenge it in a court of law in an effort to prevent us from having to cease operations in the state of New York. We are working with the international law firm Gibson, Dunn & Crutcher LLP on all civil matters, investigations and regulatory inquiries, including the current situation in New York. The Gibson Dunn team is led by Randy Mastro, co-chair of Gibson Dunn’s Litigation Practice Group and one of the nation’s leading litigators. Gibson Dunn has a team of former federal prosecutors to oversee the various inquiries and investigations. Their experience, judgment, and expertise will help us work towards appropriate resolutions. We intend to pursue this fight to the fullest to ensure that New York fantasy sports fans can continue to play the games they love.”