NY judge rejects restraining order requests for daily fantasy sports

A New York judge has declined to issue an order for DraftKings and FanDuel to obtain a restraining order to temporarily block the state attorney general’s bid to shut them down. The case began with cease and desist letters sent by Attorney General Eric Schneiderman last week, warning DraftKings and FanDuel they should stop conducting illegal gambling in New York.

On Friday last week the companies asked Justice Manuel Mendez in the Manhattan Supreme Court last Friday for an injunction, arguing that the attorney general had wrongly labeled their businesses as illegal gambling operations and that they offer games of skill, not of chance, as defined New York’s gambling laws.

Both DraftKings and FanDuel said they have several hundreds of thousands of players in New York and that they were at risk of irreparable damage if their business in the state were closed down. They have not been able to process deposits for those customers since last Friday since Schneiderman’s office had already contacted the bank and payment processors handling FanDuel’s customer deposits and withdrawals, deterring them from continuing.

Schneiderman’s lawyers told Mendez at a hearing late Monday that they had not done anything to actually prevent the companies from doing business in New York, and therefore an order to stop it could not be issued.

Mendez agreed. “They have not taken action yet to somehow enjoin the plaintiff from continuing to engage in their business here in New York,” he said. DraftKings and FanDuel have been ordered back to court on Nov. 25th.