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Group Cries Foul on NY’s Fantasy Sports Law

ALBANY, N.Y. (CN) - A new lawsuit filed in Albany Supreme Court challenged the constitutionality of the New York legislature's legalization of "Interactive Fantasy Sports" gambling.

The lawsuit coordinated by Stop Predatory Gambling, an anti-gambling group, argued that New York State Constitution §9.1 prohibits gambling and pool-selling, except for specifically granted exemptions, including wagering on horse races, charitable contests, a limited number of commercial casinos and the state-operated lottery.

The lawsuit seeks a judgment declaring Chapter 237 of 2016 New York State law unconstitutional and injunction prohibiting the implementation of the legalization of "Interactive Fantasy Sports" gambling.

FanDuel and DraftKings, major daily fantasy sports websites, suspended their operations on March 21, 2016, amidst lawsuits filed by New York Attorney General Eric Schneiderman in New York Supreme Court calling the online contests gambling and also alleging consumer fraud and deceptive advertising.

Gov. Andrew Cuomo, who is named as a defendant in the latest lawsuit, signed legislation on August 3, 2016, legalizing daily fantasy sports in New York.

At the time of the signing Cuomo said, "This new legislation strikes the right balance that allows this activity to continue with oversight from state regulators, new consumer protections, and more funding for education."

The lawsuit points out that the August legislation legalized online sports gambling just in time for the Sept. 16 kickoff of the National Football League's 2016 season.

New York Attorney General Eric Schneiderman blasted DraftKings and daily fantasy sports gambling in a November 2015 cease-and-desist letter, in which he said "Like most gambling operations, DraftKings' own numbers reveal a far different reality."

Schneiderman elaborated in his cease-and-desist order, "In practice, DFS [daily fantasy sports] is far closer to poker in this respect: a small number of professional gamblers profit at the expense of casual players. To date, our investigation has shown that the top one percent of DraftKings' winners receive the vast majority of the winnings."

A spokesperson for New York Attorney General Eric Schneiderman commented that daily fantasy sports "are creating the same public health and economic concerns as other forms of gambling, including addiction. Finally, DraftKings' advertisements seriously mislead New York citizens about their prospects of winning"

The lawsuit noted that fantasy sports are included in Gamblers Anonymous' list of activities it defines as gambling.

New York supporters of Stop Predatory Gambling helped bring the lawsuit.

"We believe in improving the lives of the people of New York," said Les Bernal, Stop Predatory Gambling's National Director. "Daily fantasy sports gambling is a huge rip-off for all citizens, regardless whether you gamble or not."

The New York State Gaming Commission offered no comment, referring inquiries to the New York State Attorney General's Office, which is handling the litigation.

The plaintiffs are represented by Cornelius Murray at O'Connell & Aronowitz in Albany, New York.

The complaints were not made available to the public by the court as of press time. Courthouse News obtained the complaints on the Stop Predatory Gambling site as part of this blog post: http://stoppredatorygambling.org/blog/spg-helps-to-file-constitutional-challenge-of-nys-internet-gambling-law/.

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