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Anti-gambling group sues NY over fantasy sports law

October 05, 2016 06:13 PM

ALBANY - The state just made daily fantasy sports gaming legal and now a group wants to make it illegal again.

The group called "Stop Predatory Gambling" has filed a lawsuit against the state saying the law legalizing fantasy sports wagering violates New York's constitution.

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"It is ludicrous to suggest that wagering on daily fantasy sports is not somehow gambling," said Neil Murray, an attorney speaking at the press conference.

Article 1, Section 9 of New York's constitution says gambling is illegal, except for specific forms like the lottery and horse-racing.

Lawmakers in June passed a bill saying fantasy sports are legal because it's not gambling, it's a game of skill.  This lawsuit, says that's avoiding the constitution.

"If the legislature can unilaterally define gambling in a way that contradicts what every normal person understands to be the meaning of the term, then we're in trouble," said Murray.

New York's Attorney General Eric Schneiderman is the one who shut down fantasy in November last year.  Now, he may have to defend it.  His office sent us a statement saying, “We will review the complaint. The Attorney General has said he will enforce and defend the law.”

A public relations firm representing both FanDuel and DraftKings points to their interpretation of Section 9 of the constitution in a statement, "the constitution specifically gives the legislature the power to define what is and what is not gambling," wrote Marc La Vorgna of MLV Strategies. "They have no case."

In the statement, La Vorgna also asks why friendly card games and trading stocks and bonds aren't gambling, saying there's chance involved in those activities.  (See full statement below)

The group, "Stop Predatory Gambling" is against all forms of state sponsored gaming.

"This is just a bridge, to bring in other more extreme forms of gambling behind it, which are far more lucrative than DFS itself," said Les Bernal, Stop Predatory Gambling director.

The Legislature passed the bill legalizing fantasy in June. The governor signed it in August. Stop Predatory Gambling opposes all forms of state sponsored gaming. 

Stop Predatory Gambling lawsuit against New York State by WNYT NewsChannel 13 on Scribd

Full statement from Marc La Vorgna on behalf of Fanduel and DraftKings:

“The state constitution specifically gives the legislature the power to define what is – and what is not – gambling, and the legislature has done so a number of times in the past and long before the emergence of fantasy sports. The Attorney General, who certainly has had some strong opinions about fantasy sports, has clearly stated he will enforce and defend this new law. This is a layup – they have no case.”

Below is some background you can attribute to me/the companies. Please give it a quick read if you can. Additionally, important to note that Stop Predatory Gambling and their attorney incorrectly stated the Attorney General said fantasy sports was illegal “under the constitution” – that is NOT correct. The Attorney General filed suit against the fantasy operators based on the definitions in New York State law (penal code 225) at the time, not the constitution. That law, which legislature passed years ago, has now been amended by the legislature, which they have the power to do, thus the AG said on multiple occasions that he will “enforce and defend” the new law as it was an appropriate action by the legislature.

Fantasy Sports Law and the New York State Constitution

  • New York State constitution provides that “gambling,” with specified exceptions, is prohibited.
  • But the constitution does not define gambling, instead the constitution specifically directs the Legislature to decide what falls within the definition of gambling.
  • Article 1, Section 9 states “the legislature shall pass appropriate laws to prevent [gambling] offenses.”
  • So while Constitution prohibits “gambling,” apart from identified state-approved exceptions, it recognizes the need for definition of what constitutes gambling and expressly delegates definitional and implementation authority to the Legislature.
  • The legislature exercised that definitional authority in Penal Code Section 225, which defines gambling.
  • In the new fantasy law, the legislature simply added to their own the definition in Penal Code 225, clarifying that fantasy sports do not fall within the definition of gambling in New York State.
  • The power the constitution gives the legislature here is not unique. The state constitution gives the legislature similar power to define terms or activities in other areas.
  • For example, the state constitution, requires the Legislature to “enact laws excluding from the right of suffrage all persons convicted of . . . any infamous crime.”
  • The constitutional language empowers the Legislature to determine what is an “infamous” crime and how long a convicted person will be ineligible to vote, and the legislature, using its power provided by the constitution, recently made a change to what defines an “infamous crime” by restoring voting rights for some convicted New Yorkers. (citation)
  • The Legislature has long exercised this same role in defining what conduct is (and is not) gambling. For example, the Legislature has excluded certain social games from the penal law, so New Yorkers who play in friendly card games or private contests are not criminals. (citation)
  • The Legislature also has established that investing or other market activities are not gambling, even though they involve staking money on uncontrollable events.
  • These choices all fall within the authority the constitution expressly gives the Legislature and the same is true for the new fantasy sports legislation.
  • The Legislature was well within its authority to enact a statute that, like federal law and the laws of a number of other states, makes clear that fantasy sports are not a prohibited gambling activity.

New York State Constitution, Article 1, Section 9 provides, in relevant part:

[N]o lottery or the sale of lottery tickets, pool-selling, book-making, or any other kind of gambling, except lotteries operated by the state and the sale of lottery tickets in connection therewith as may be authorized and prescribed by the legislature, the net proceeds of which shall be applied exclusively to or in aid or support of education in this state as the legislature may prescribe, except pari-mutuel betting on horse races as may be prescribed by the legislature and from which the state shall derive a reasonable revenue for the support of government, and except casino gambling at no more than seven facilities as authorized and prescribed by the legislature shall hereafter be authorized or allowed within this state; and the legislature shall pass appropriate laws to prevent offenses against any of the provisions of this section. (Emphasis added.)

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WNYT Staff

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