\nEben Novy-Williams, Bloomberg \u00b7 November 11, 2015 at 7:22 pm<\/p>\n
\t(Bloomberg) \u2014 Not all daily fantasy operators are gearing up to fight New York\u2019s rejection of their business. And at least one of their financial-industry allies also is pulling back.<\/p>\n
\tFour small daily fantasy sports sites \u2014 TopLine Game Labs LLC, which operates fantasy site DailyMVP, DraftDay, DraftOps and MondoGoal Trading Ltd., an international platform focused on soccer \u2014 say they will stop letting users from New York enter their paid contests. And one financial institution said it will no longer facilitate card payments for New Yorkers seeking to use such platforms.<\/p>\n
\tNew York Attorney General Eric Schneiderman Tuesday ordered the two biggest daily fantasy sites, DraftKings Inc. and FanDuel Inc., to cease operations in the state, arguing their industry facilitates gambling. While those two behemoths indicated they will continue letting customers play while they contest the order, other companies got the message.<\/p>\n
\t\u201cIt\u2019s pretty cut and dry,\u201d Shergul Arshad, chief executive officer of Isle of Man-based MondoGoal, said in a telephone interview. \u201cWe\u2019re not state regulators. We understand why this may or may not be viewed by different states in different ways.\u201d<\/p>\n
\tVantiv, a Cincinnati-based firm that helps facilitate card payments for some daily fantasy sports sites, told them to stop accepting players from New York, according to an e-mail it sent to clients and reviewed by Bloomberg. Vantiv didn\u2019t respond to several requests for comment.<\/p>\n
\tKeeping Tabs<\/p>\n
\tConsumer credit-card issuers including JPMorgan Chase & Co. and Bank of America Corp. said New York customers can continue using their cards to fund daily fantasy sports accounts. Meantime, the lenders are monitoring the situation.<\/p>\n
\tIn letters to DraftKings and FanDuel on Tuesday, Schneiderman highlighted their omnipresent advertising, which \u201ccontinues to promote DFS like a lottery, representing the game to New Yorkers as a path to easy riches that anyone can win.\u201d Those messages, Schneiderman said, are a tacit admission that daily fantasy sports constitute \u201cgames of chance,\u201d which are considered gambling, and not \u201cgames of skill\u201d as the companies contend.<\/p>\n
\tFanDuel CEO Nigel Eccles said in a call with reporters that his company is trying to schedule talks with Schneiderman. A DraftKings spokesman said in a statement that it had retained a law firm and intends \u201cto pursue this fight to the fullest.\u201d<\/p>\n
\tTheir first move, according to lawyers, would be to ask a judge to block Schneiderman from bringing any kind of criminal or civil action.<\/p>\n
\tBig Blow<\/p>\n
\tLosing the New York market would be a big blow for FanDuel and DraftKings. The state has the most daily fantasy players in the U.S. and accounts for 13 percent of the market, according to a player survey conducted by Eilers Research LLC. The second biggest state for daily fantasy sports is California, which makes up 10 percent of the customer base.<\/p>\n
\tThe breakdown is different for MondoGoal, which Arshad said is the largest overseas operator of daily fantasy games. The company takes in \u201chundred of thousands of dollars\u201d in entry fees each month, with about 10 percent from the U.S. MondoGoal has partnerships with a number of European soccer teams, including Liverpool, FC Barcelona, Chelsea FC and AS Roma.<\/p>\n
\t\u201cWe are pleased by reports that several daily fantasy sports operators have decided to comply with the law and cease gambling operations in New York,\u201d Matt Mittenthal, a spokesman for Schneiderman, said in a statement. \u201cWe urge FanDuel and DraftKings to follow this example, by immediately meeting the terms of the Attorney General\u2019s letter, and by ending their illegal gambling enterprise \u2014 and the economic and public health harms that come with it \u2014 here in New York.\u201d<\/p>\n
\tDailyMVP\u2019s offerings and advertisements aren\u2019t necessarily the same, said David Gellar, CEO of TopLine Game Labs LLC, which operates DailyMVP. Still the company will comply with Schneiderman\u2019s order \u201cuntil there is more clarity and\/or a reversal of the AG\u2019s position.\u201d<\/p>\n
\tJay Z Reference<\/p>\n
\tNic Sulsky, president of Draft Day Gaming Group Inc., said the company decided Tuesday evening to suspend participation in \u201cfor-money\u201d games by New York residents. He added that the company will continue to monitor developments and could reconsider if the circumstances change.<\/p>\n
\tMarie Vozikis, operations manager for Emil Interactive Games, which runs DraftOps, said the same. DraftOps has partnerships with the National Hockey League\u2019s Anaheim Ducks, Washington Capitals and New York Islanders, the NBA\u2019s Washington Wizards and Brooklyn\u2019s Barclays Center.<\/p>\n
\t\u201cUntil New York passes legislation that clearly declares daily fantasy sports legal or DraftKings\/FanDuel receive some declaratory ruling from a court of law that makes it safe to operate, we think it is wise not to operate within the state,\u201d Vozikis said in an e-mail.<\/p>\n
\tDraftKings and FanDuel are each valued more than $1 billion and have investors across the sports, media and venture-capital industries. A smaller operator, DraftPot, announced Tuesday that it would continue to operate in New York, tweeting the hashtag #FantasyForAll alongside a link to Jay Z\u2019s song \u201cEmpire State of Mind.\u201d<\/p>\n
\t\u2013With assistance from Christie Smythe in Brooklyn and Elizabeth Dexheimer in Washington.<\/p>\n
No replies were posted for this topic.<\/p>\n","protected":false},"excerpt":{"rendered":"
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