The New York Daily Fantasy Sports Lawsuit Could Pose Problems For Online Poker

October 6, 2016
The New York Daily Fantasy Sports Lawsuit Could Pose Problems For Online Poker

A lawsuit that calls into question the legality of a daily fantasy sports law passed by New York earlier this year was filed this week.

That lawsuit has a chance to affect the legalization efforts for NY online poker moving forward as well.

The DFS lawsuit in New York

The filing from a group of NY citizens says that the law authorizing, legalizing and regulating DFS is not constitutional.

The law simply changed the state’s gambling code to exclude DFS from the definition of gambling, instead of amending the constitution. The lawsuit contends that the action taken by the the state legislature and Gov. Andrew Cuomo when they enacted a law regarding DFS this summer doesn’t pass muster under the constitution.

The plaintiffs also go on to say that DFS is gambling, and not a game of skill.

The interests behind the lawsuit — including the group Stop Predatory Gambling — are certain of the law’s illegality. But the opposition — including the law’s authors and the DFS industry — are just as certain it is just fine:

Here was a joint statement from DFS operators DraftKings and FanDuel after the lawsuit came to light:

“The state constitution specifically gives the legislature the power to define what is – and what is not – gambling, and the legislature has done so a number of times in the past and long before the emergence of fantasy sports. The Attorney General, who certainly has had some strong opinions about fantasy sports, has clearly stated he will enforce and defend this new law. This is a layup – they have no case.”

The problem for online poker

Who is on the right side? That’s going to be up to the New York State Supreme Court to decide, at least initially.

But if the court system sides on the side of the law being unconstitutional, it also poses a real problem for ongoing efforts to legalize online poker in the state.

Why? Because the same mechanism is being used in regard to online poker.

An online poker bill passed in the Senate earlier this year but was not taken up by the Assembly. The legislation attempts to get around having to amend the constitution by calling poker a game of skill, much like the DFS law does.

The state constitution prohibits “pool-selling, bookmaking, or any other kind of gambling,” unless it is specifically exempted in the constitution. Whether the legislature can call things like DFS and poker “not gambling” via the state gambling code, without a constitutional amendment, will be the central question of the lawsuit.

All of the above means a successful lawsuit on the DFS front would likely mean online poker would also be adversely affected, and would have to go the route of changing the constitution.

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No answer on DFS, poker soon?

If the lawsuit isn’t just dismissed by the NY State Supreme Court, a lengthy court battle could be in the cards.

Any decision in the case would certainly be appealed to a higher court, meaning we could be years from a determination of law.

There’s also uncertainty that New York will pass an online poker bill at all, although there is a chance it could happen in 2017. Complicating matters is Rep. Gary Pretlow, who chairs the gaming committee in the Assembly and is on the record saying poker is gambling.

Either way, the path forward for online poker could very well be affected by the DFS lawsuit. A constitutional amendment is a safer route, legally, but the process takes a long time and has no guarantee of success.

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