Yahoo Out; Regulations are not in the budget?

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[toc]Yahoo Daily Fantasy will stop taking entry rights into the state of new York after regulations by DraftKings and FanDuel cease operations in the State.

Also on Tuesday, a media report said that a powerful member of the State Assembly casts doubt on whether daily regulation of fantastic sports would be linked to state budget.

Yahoo outside New York

The first major domino to fall after the departure of DraftKings and FanDuel from New York was Yahoo, the DFS operator # 3 in space. A Yahoo spokesperson made the following statement:

“Due to recent developments regarding paid Daily Fantasy Sports (DFS) in New York State, Yahoo will suspend offering paid DFS contests to New York residents from Wednesday 23 March, pending further review. Yahoo believes its contests are legal and we will continue to assess DFS ‘legal environment while providing a compelling fantasy sports experience to all of our users. Our decision today has no impact on users in other states.

A statement from the NY AG was released later today:

“Following yesterday’s announcement that FanDuel and DraftKings will follow the law and stop betting in New York State, Yahoo has now informed my office that it will do the same. New York law has long banned sports betting, including betting on daily fantasy sports. As long as this is the case, I will continue to apply the law vigorously and I am happy that these companies have agreed to follow it.

The New York Attorney General cease and desist letters and the lawsuits were only brought against DraftKings and FanDuel. However, the action of the GA could be seen as a de facto action against any DFS operator, as the case of any DFS site would be essentially the same. Any operator who was still in New York before Monday was essentially using DraftKings and FanDuel as legal cover.

Whether AG Eric schneiderman would have the appetite to tackle a smaller DFS operator is unknown, but it would likely be a reckless legal strategy to find out. Unless you go to court to fight for legality – something we don’t expect to see – you might expect most DFS operators will follow Yahoo’s lead in the coming days.

DFS and the budget, not supposed to be?

The New York colonies have also drawn attention to Albany and efforts to regulate the DFS in the state legislature.

The idea that daily fantastic sports could be tied to the state budget fosters the hope that the regulations would be sped up through state house. Corn J. Gary Pretlow – the chairman of the Assembly’s racing and betting committee – has cast a little shadow on these hopes in a interview with GambingCompliance (paying).

From GC:

“Senator Bonacic’s bill is not in the Assembly’s version of the budget and it likely will not be in the final version,” Pretlow told GamblingCompliance in an interview Monday.

Pretlow was referring to a bill recently presented by Senator John Bonacic, which is included in the Senate proposal for the state budget.

Also, yet another DFS bill in New York?

Pretlow also indicated that he would introducing its own DFS legislation. It’s a signal that he and Bonacic – the gaming president in the Senate – are not in step on what should be done regarding DFS.

There is already six different bills in the legislature, although no action (beyond the introduction) has been taken on any of them. However, Bonacic’s Bill is probably the only one worth watching (other than Pretlow’s future Bill).

The state legislature is in session until the end of June, so there is still time to iron out the differences. But the fact that two key players in the New York legislature are not on the same page is an obstacle that will need to be overcome at some point.

Luciano Mortula / Shutterstock.com

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