Is Daily Fantasy Sports About to Become Regulated in New York?

Daily fantasy sports (DFS) has been available to people of New York for a few years. However, New York sports betting began on Saturday and it has subsequently brought into question the potential regulation on daily fantasy sports in the Empire State.

On Nove. 10, 2015, Attorney General of New York, Eric Schneiderman, issued a cease-and-desist order to DraftKings and FanDuel’s DFS operations, with the argument that DFS was illegal under state law, saying that it was gambling and not skill. However, on June 18, 2016, the New York Senate approved legislation to legalize daily fantasy sports again.

Now, in early 2022, we’re back in the same conversation and the New York Court of Appeals will need to determine whether daily fantasy sports is a game of skill or a game of chance on Feb. 8, five days before the Super Bowl.

Has Sports Betting Changed Fantasy Sports?

Much of the change in sports betting laws come from fantasy sports and how the seemingly next natural step in iGaming was online sports betting.

The idea as to why the states like Hawaii and Utah have a gray area in daily fantasy sports is simply their strict laws on gambling and how DFS is the closest thing to sports betting you can get. New York seems to be taking a leaf out of this book now, too, with the consideration that playing fantasy sports could eventually lead to sports betting, and/or it is indeed gambling.

Will New York See Regulations for Fantasy Sports?

IWith a court case ongoing, the verdict could go either way. The two areas contrast greatly, however, as one is betting with real money and the other is simply for fun and competition with the option to use real cash.

Time will tell in the New York court case on the constitutionality of fantasy sports set for early February, but given the 51% tax rate from sports betting revenue for the state, it would be surprising to see New York create further issues for the sports betting operators over there and make it even tougher for the likes of DraftKings to acquire new players.

The New York Court of Appeals will reargue the DFS case on Feb. 8 as a result of the 3-3 ruling from the judges on Oct. 5.