The New York court system has been busy today. Following an investigation by the New York Attorney General into a data scandal surrounding DraftKings and FanDuel in October, a court ruling was established Friday afternoon that prohibited daily fantasy sports operators to accept any payments or wagers from residents of the state.
This isn't a groundbreaking ruling in the United States; in fact, Nevada joined 5 other states in banning DFS entries from its residents shortly after the announcement of October's investigation. However, the significance of losing the New York market cannot be overstated, and would be much more likely to lead to a domino effect in a number of other states still allowing participation in DFS competitions.
Both DraftKings and FanDuel immediately appealed the decision, which was then presented to the New York Appeals Court. After a few hours, the Appeals Court granted an emergency stay on the case, essentially providing the companies with temporary relief from the lower court's ruling.
While New York residents can now take part in both DraftKings and FanDuel competitions, at least until a more in-depth trial and official hearing can take place, the day's earlier ruling is an ominous one for DK, FD and the daily fantasy sports industry in the United States in general.
We're almost certain to see additional trials and investigations throughout the country as the debate over whether DFS qualifies as gambling or a game of skill continues to rages on. For now, the question is whether DraftKings and FanDuel can weather the storm and entice their fans to continue participating in their contests until a resolution is ultimately achieved.