Daily fantasy sports (DFS) operators having a free run in New York as surprisingly there is regulatory body to oversee their operations for now. This comes a month after acting state Supreme Court Justice Gerald W. Connolly declared sports contests illegal in the state.
Now, the state agency which was supposed to regulate the industry, has stopped exercising regulatory powers over a number of daily fantasy sports companies that offer wagering to ‘millions’ of customers in the state.
While the state contemplates regulating the DFS industry, the contests taking place as of now continue to stay unregulated.
No appeal has been put forward yet in relation to the recent ruling, As part of removing its regulatory authority over the DFS industry, the state’s Gaming Commission also cannot impose special levies on the firms as three pro sports leagues’ seasons are well underway – a period when New York punters are most active.
The latest development surfaced after the Gaming Commission removed any reference to the DFS industry on its website. Prior to the ruling, the state agency had released financial information on the industry in the public domain along with a list of approved DFS companies, as well as temporary regulations that would protect consumers.
Gaming Commission Spokesman Brad Malone said they needed to modify the agency’s website, in line with the decision to stop regulating DFS. Whether or not DFS operators have made changes to their offerings or rules is not immediately known.
Ruling Leaves DFS Industry in Limbo
The judge ruled sports contests are an illegal form of gambling in New York, requiring a constitutional change to make it legal. But Judge Connolly also dropped any criminal penalties being imposed against DFS operators and in doing so upheld a 2016 law that paved the way for DFS contests in the state. As a result of this, sports wagering is continuing to run in a regulatory-free environment.
FanDuel one of the biggest DFS operators in the country said it will continue to offer fantasy sports to New York customers in light of the decision. A spokeswoman from the company also said they support a regulated industry and would cooperate for regulatory oversight to be permanently restored.
When New York finally decides to appeal the ruling by Judge Connolly, the state’s regulatory role will likely restart. The state’s appeals process could take a shorter route, bypassing the midlevel courts and taking the case directly to the Court of Appeals.
