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N.Y. A.G. Makes Latest Move in Fantasy Battle

(CN) - New York Attorney General Eric Schneiderman on Tuesday asked a branch of the state's high court for a preliminary injunction against fantasy-sports websites FanDuel and DraftKings.

Schneiderman filed enforcement actions against the websites in New York State Supreme Court in New York County.

The move comes less than a week after DraftKings and FanDuel announced separate lawsuits challenging the attorney general's recent prohibitions on their businesses.

Fantasy-gaming websites have been under heat for more than a month amid reports that insiders rig the game through sophisticated algorithms running confidential information.

Nevada became one of the first states to pull the plug on DraftKings, FanDuel and similar companies with a cease-and-desist order on Oct. 15.

Schneiderman's office followed suit in a scathing Nov. 10 letter that splashed cold water on promotions for the companies that say fantasy sports is the "simplest way of winning life-changing piles of cash."

"Like most gambling operations, DraftKings' own numbers reveal a far different reality," Schneiderman wrote on Nov. 10. "In practice, [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."

FanDuel maintains in a 17-page complaint that Schneiderman took the "legally incorrect position that the presence of prize money in these contests transforms FanDuel's activities into illegal sponsorship of gambling, and that FanDuel's advertisements have been false and misleading."

At 28-pages, the DraftKings lawsuit pulls fewer punches in accusing Schneiderman of using "strong-arm tactics and defying the rule of law."

However, the lawsuits filed by Schneiderman on Tuesday accuse the websites of exploiting the goodwill associated with legal fantasy sports.

"The speed of DraftKings' games, the size of their jackpots, and the degree to which the games are sold as winnable have ensnared compulsive gamblers and threaten to trap populations at greater risk for gambling addiction, particularly male college students," Schneiderman's lawsuit against DraftKings states. "This has prompted gambling addiction experts and advocates to sound the alarm."

Tuesday's complaint against FanDuel makes identical allegations, claiming the company "uses advertisements to lure New York residents with promises of easy riches for a lucky few sports fans."

Schneiderman says the fantasy-gaming websites are illegal under state law that has outlawed bookmaking and other forms of sports gambling since 1984. He wants a court order stopping them from operating in New York.

"Rather than a new type of fantasy league, [daily fantasy sports] simply devised another way to bet on sports," Schneiderman's lawsuits state.

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