New York’s top court rules in favor of fantasy sports bets

Law Firm News

New York’s highest court ruled Tuesday that fantasy sports contests like those run by FanDuel and DraftKings are allowed under the state constitution, turning back a challenge to the popular games.

The state Court of Appeals reversed an appeals court’s decision last year that found interactive fantasy sports violated the state constitution’s ban on gambling. The games allow players to assemble a roster of athletes in a sport, using individuals performance statistics to determine the winner. They annually bring in hundreds of millions in entrance fees statewide.

The lawsuit was bought several years ago and did not target mobile sports betting, which began in New York earlier this year.

In a 4-3 ruling, New York’s top court clarified the scope of that the state’s constitutional prohibition on gambling. Chief Judge Janet DiFiore wrote that the gambling prohibition doesn’t include skill-based competitions in which players who win a prize exercise “substantial influence” over the contest’s outcome.

DiFiore wrote that the outcome of a interactive fantasy sports contest “turns — not on the performance of real-life athletes, as it would with respect to a bet or wager — but on whether the participant has skillfully composed and managed a virtual roster so as to garner more fantasy points than rosters composed by other participants.”

The fantasy sports measure signed into law by then-Gov. Andrew Cuomo in 2016 cleared the way for companies like DraftKings and FanDuel to operate and be regulated in New York. DraftKings and FanDuel both said they were pleased with the decision.

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