The fantasy sports service from Yahoo is the latest daily fantasy service to be faced with an investigation in the state of New York. Yahoo is set to appear in court for a hearing on the matter on November 25. Many daily fantasy sports companies, such as DraftKings and FanDuel, have been scrutinized by regulators for supposedly being a form of illegal gambling.
Some states have already gone as far as to outlaw the companies completely. New York Attorney General Eric Schneiderman is currently working to have these companies shut down entirely in the state. Last week, Schneiderman sent out cease and desist letters to DraftKings and FanDuel, demanding that they stop taking money from people in New York. However, the Attorney General will require a court order before he can shut the companies down in the state of New York.
Schneiderman said, “Daily fantasy sports gaming is nothing more than a rebranding of sports betting. It is plainly illegal.”
A spokesperson for Yahoo said, “We are monitoring industry trends and events closely and believe that we offer a lawful product for our daily fantasy sports users.”
Daily fantasy sports have blossomed in recent years. They allow participants to draft teams of players for a single day or over a weekend. Many fans like the fact that they essentially start over every time. In traditional fantasy sports, a bad draft can ruin a season. But in daily fantasy sports, a bad draft isn’t a big deal. And one successful night can potentially lead to a large amount of winnings.
FanDuel recently stopped allowing New Yorkers to participate in its paid contests. However, DraftKings has yet to announce any changes. Research shows that New York has more participants in daily fantasy sports than any other state.
FanDuel said in a statement, “We believe that this restriction is temporary and we hope to be able to offer our paid contests to New Yorkers again very soon.”
Last year, nearly 90% of the players on DraftKings lost money. Recently, DraftKings requested television networks to be allowed to cutback on planned advertising.