New York Racinos Approve Move to Halt Fantasy

The move this week by New York Attorney General Eric Schneiderman against daily fantasy sports sites DraftKings and FanDuel may have its vocal detractors, but the state’s racetrack owners with attached casino operations have come out in full support of the action taken by the state’s top lawyer.

One day after Schneiderman issued cease and desist letters ordering the two companies to cease taking bets from New York residents, the New York Gaming Association this evening is jumping to the attorney general’s side.

“We applaud Attorney General Schneiderman for attempting to bring some clarity to the issue of fantasy sports betting,” said James Featherstonhaugh, the trade group’s president.

The group has its obvious vested interest: competition for the gambling dollar is particularly fierce in New York, a state that has sharply grown its gambling industry over the years and is preparing to give up to four new full-blown commercial licenses in upstate regions.

The two companies have not shut off their business with New York residents, vowing to pursue the dispute in court with Schneiderman, who says the fantasy sports companies are engaged in illegal gambling under the definition of the state’s constitution. The constitution permits a lottery, racetrack gambling and, per a 2013 amendment approved by voters, up to seven new commercial casinos.

The stakes, financially and for the legal precedents that could be set, are high. FanDuel reports that 600,000 of its customers, or 10% of its business, is from New Yorkers, while DraftKings says it has 500,000 New York fantasy sports players.

Schneiderman has said the fantasy sports companies have an option: Get the constitution changed to permit what he calls their now illegal form of gambling. Schneiderman maintains fantasy sports playing includes an element of chance, which is illegal in New York unless a form of gambling is specifically carved out in the constitution; the two fantasy sports companies insist their customers win or lose money based on skill, not chance.

“If the games are found to be illegal, they should be stopped immediately until the appropriate legislative and constitutional changes are made,” the gaming association’s Featherstonhaugh said in a written statement Nov. 12.

“If the games are found to be legal, they should be taxed and regulated like all other forms of gaming with safeguards for problem gambling,” added Featherstonhaugh, an Albany lobbyist and one of the owners of Saratoga Casino and Raceway, a harness and VLT parlor in Saratoga Springs.

The gaming association’s members include the owners of racetracks and operators of track-based VLT facilities, including Finger Lakes thoroughbred track upstate and the operators of Resorts World casino at Aqueduct racetrack.