New York State attorney general Eric Schneiderman has ruled that fantasy football companies such as FanDuel and DraftKings must cease and desist operation in New York. Because of New York’s historic role in consumer protection this ruling may spread into other jurisdictions. According to the New York Times, Mr. Schneiderman said:
“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,” adding, “Today we have sent a clear message: not in New York, and not on my watch.”
Fantasy football is a wildly popular multbillion dollar industry and New York State is said to have 500,000 active players. The attorney general said that it ”appears to be creating the same public health and economic problems associated with gambling.” Of course he failed to point out that whereas fantasy football is competitive and has a high payout ratio, the New York state Lottery is a monopoly and has a much lower payout. Plus it is sanctioned by the state creating a much worse moral hazard, especially for the poor.
