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Daily fantasy sports sites agree to stop taking bets in New York

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The nation’s two largest daily fantasy sports websites have agreed to stop taking bets in New York, potentially through most of the professional baseball season, as lawmakers consider legalizing the popular online contests, the state attorney general announced Monday.

The deal struck between Attorney General Eric Schneiderman and the companies, DraftKings and FanDuel, essentially takes the dispute out of the courts and into the capitol, where lawmakers indicate legislation regulating the industry could pass by mid-May.

Schneiderman’s claims against the companies for false advertising and consumer fraud will not be affected by the agreement, according to the stipulation.

“As I’ve said from the start, my job is to enforce the law, and starting today, DraftKings and FanDuel will abide by it,” he said in a statement.

In statements, spokespeople for both companies said they would seek to clarify state law to let their New York customers play without ambiguity.

Hundreds of thousands of New Yorkers play fantasy sports, paying entry fees to manage rosters of teams like a general manager and then earning points depending on how well those players do. The companies depict their contests as games of skill, not chance.

But Schneiderman disagreed and in November sent the companies cease-and-desist letters, arguing the businesses were essentially illegal gambling operations based on chance. The games, he argued, are dependent on factors, such as player injuries or bad weather, that could affect the outcome despite a player’s skill level.

Under the agreement, if Albany lawmakers fail to pass legislation, a state appeals court will take up the case during its September term. In the meantime, the companies can’t take bets from users with New York IP addresses and must withdraw their New York clients’ balances within seven days of being asked to do so.

Republished with permission of the Associated Press.

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