NY Appeals Court Lets DraftKings, FanDuel Continue Business In State While Awaiting Another Ruling

A New York appeals court Friday blocked the immediate shutdown of daily fantasy sports companies FanDuel and DraftKings, hours after New York Supreme Court Justice Manuel Mendez had granted a preliminary injunction against the two most prominent sites in the multibillion-dollar industry.

Attorney General Eric Schneiderman presented arguments last month that daily fantasy sports games amounted to gambling outlawed by state law.

"New York State penal law does not refer to 'wagering' or 'betting,' rather it states that a person, 'risks something of value,' " Mendez wrote. "The payment of an 'entry fee' as high as $10,600 on one or more contests daily could certainly be deemed risking 'something of value.' "

"The granting or denial of a preliminary injunction does not constitute a determination of the ultimate issue," Mendez noted in upholding a cease-and-desist letter issued by Schneiderman against the fantasy sports sites.

After Mendez's ruling, DraftKings attorney David Boies said he would "immediately file an emergency notice of appeal in order to preserve the status quo."

"Daily Fantasy Sports contests have been played legally by New Yorkers for the past seven years and we believe this status quo should be maintained while the litigation plays out," Boies said.