Just when it looked like things couldn’t get much worse for the daily fantasy sports industry, the New York State attorney general Eric Schneiderman┬áhas thrown a new set of worries their way.

He’s demanding that Draft Kings and Fan Duel refund every penny the New York-based players have lost on their sites. $5,000 per New York player.

If it comes to pass, the Empire State’s punishment could be very expensive for the DFS business. According to ESPN.com, at least 600,000 New York residents have lost a total of nearly $200 million on the two sites.

Schneiderman’s latest approach to the DFS battle comes after a December 4 attempt to shut the two sites out of New York State entirely was overruled by an appeals court.

He’s now moved his anti-DFS strategy to focus on a subject that’s near and dear to the mainstream online gambling industry, deposit bonuses. In the eyes of the NY AG, deposit bonuses constitute fraud because a $200 deposit bonus would really only yield a player $8 and those $8 would unlock only after the player spent $5,000.

Schneiderman also suggests that DFS sites are engaging in deceptive advertising by showing player winnings in their ads, but only showing their gross winnings. He says a more accurate ad would deduct the amount the player lost before their big check wins. (Only about 11% of NY DFS players are net winners.)

For their parts, both Fan Duel and Draft Kings representatives’ have called the NY suit, “meritless,” and plan to fight it vigorously.

The two sides are due to square off in a New York courtroom on January 4 where a judge will decide whether DFS sites will continue to be allowed to operate in New York State.

 


Tags: ,

Related posts: