Alfonse D'Amato

Attorney general puts spotlight on online gambling

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Ever wonder why everyone in your workplace always looks so busy on his or her computer? Well, there’s a good chance that your colleagues are playing some sort of online fantasy sport.

In fact, nearly 75 million Americans participate in fantasy football alone. It’s so popular that it was a topic in the third Republican presidential debate.

As has been the case with other popular subcultures, companies began to think of ways to capitalize on America’s obsession with fantasy sports. In 2012, the online service DraftKings was started, offering users a way to set up accounts to enter daily fantasy sports contests against opponents and win money based on individual player performances. Its largest competitor, FanDuel, uses the same model; both take a percentage of the money being wagered, better known as a vig, to profit and cover expenses.

Both companies have had phenomenal success. FanDuel alone claims to sign up 20,000 to 30,000 players each day.

But that may soon change. On Nov. 10, New York state Attorney General Eric Schneiderman ordered that DraftKings and FanDuel stop accepting “bets” from New York residents, claiming that the online fantasy games constituted illegal gambling under state law.

Schneiderman stated, “It is clear that DraftKings and FanDuel are the leaders of a massive, multibillion-dollar scheme intended to evade the law and fleece sports fans across the country. Today we have sent a clear message: not in New York, and not on my watch.”

This is a major blow to this fairly new industry. According to a DraftKings spokesperson, there were more than 500,000 daily fantasy sports users in the state. Schneiderman has a proven record as a consumer-protection advocate. Many believe that his stance against fantasy gaming could move officials in other states to question whether the industry should be allowed to operate there.

Fantasy sports companies argue that their games should not be considered gambling because they involve more skill than luck, and were legally sanctioned by a 2006 federal law put in place to exempt fantasy sports from a ban on online financial wagering.

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