A little over a month after opening his investigation into daily fantasy sports sites DraftKings and FanDuel, New York Attorney General Eric Schneiderman has ordered the two companies to stop taking bets in New York state. Although both companies claim their product is a game of skill, Schneiderman's investigation has concluded that it's illegal gambling. He sent cease-and-desist letters to each company.Daily fantasy sports sites have come under increased scrutiny since the opening of this investigation, which was triggered by a DraftKings employee potentially using inside information to increase his odds of winning on rival sites. Both sites have since taken measures to prevent a similar incident in the future, but that did not stop Schneiderman from continuing his investigation.On October 19th, the Nevada Gaming Control Board declared daily fantasy sports as gambling and ordered all unlicensed companies, including DraftKings an FanDuel to cease operations in the state.In a statement to the New York Times, a DraftKings spokeswoman said of the attorney general: "We're disappointed he hasn't taken the time to meet with us or ask any questions about our business model before his opinion." FanDuel was much more aggressive in its response:
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This skill vs. luck question will be the central question in the fight, and given the amount of money both companies have spent flooding airwaves and pixels with advertisements, there will surely be a fight. The companies can challenge the cease-and-desist order in court. In order for the state's interpretation of the game to prevail, a judge would have to find that "chance is a material factor in fantasy sports," thus making it gambling and not a game of skill.[New York Times]"Fantasy sports is a game of skill and legal under New York state law. This is a politician telling hundreds of thousands of New Yorkers they are not allowed to play a game they love and share with friends, family, co-workers and players across the country."