The New York Daily Fantasy Sports Case - Part I

The New Sports Economy Institute Files Amicus Brief in White v. Cuomo, Oral Arguments Around the Corner

Well, it has been a while, hasn’t it?

While we have not posted in a while, we have been working hard behind the scenes. We submitted an amicus brief in White v. Cuomo, the quite important, current DFS case in New York. Here is the amicus brief:

The New Sports Economy Institute Amicus Brief to the New York Court of Appeals

The amicus brief makes the point that we have been making for a while now: DFS is not a game. Rather, DFS is a claim on future contingent events, specifically athlete performances in sports. You might recall that we made that point in the context of IRS Excise Tax (this is Part I of our five-part series, The IRS vs. Daily Fantasy Sports). We also covered the Illinois DFS case, Dew-Becker v. Wu, which we believe was incorrectly decided.

After a bit of a hiatus, the oral arguments are finally around the corner.

Our arguments may be novel, but we are confident we have this one right. DFS is not, and has never been a game. The unavoidable conclusion for New York is that DFS is therefore illegal gambling under the Penal Law. 

We are looking forward to the Court probing this matter during the oral arguments. It would certainly be interesting to hear what both parties think about our position that DFS is not a game.

The economic and legal issues in this case are super interesting, which we will cover extensively over the next two weeks; so is the storyline itself. 

The Plaintiff is not a big name company or institution. The Plaintiffs consist of four women: Jennifer White, Katherine West, Charlotte Wellins and Anne Remington. From the complaint:

Plaintiffs in this action are citizens who are residents and taxpayers of the State of New York who either have gambling disorders or are relatives and family members of such persons. Their heartbreaking stories include a litany of suffering marked by child neglect, bankruptcy, divorce, loss of homes and the agony of rehabilitation and relapse, all directly caused and threatened to continue to be caused by DFS gambling.

On the other side is the state of New York, now led by two women. Kathy Hochul is the 57th and first female governor of the state and Letitia James, the state Attorney General, is the first African-American and the first woman to be elected to the position.  

Neither of them had anything to do with this case at its outset. They now find themselves in the unfortunate position of defending a position that the State of New York viciously attacked six years ago. In fact, the case can be traced directly to the actions of their predecessors. Andrew Cuomo, the previous governor, was the one who signed the Interactive Fantasy Sports Bill into law on August 3, 2016. The reason that the Interactive Fantasy Sports Bill landed at Cuomo's desk was because the then-Attorney General, Eric Schneiderman, despite having an extremely strong case in our opinion, decided to settle with the daily fantasy sports operators. Letitia James, who just issued a subpoena in an investigation into Andrew Cuomo's book, succeeded Eric Schneiderman (Barbara Underwood, the current Solicitor General of New York, briefly served as the Attorney General after Eric Schneiderman and before Letitia James).

The top two women in the state are in the unfortunate position of having to defend a law that was put in place by their male predecessors (both of which resigned over sexual harassment allegations), one they had absolutely nothing to with, against four women, whose lives were allegedly ruined, with one exception, because of their fathers’ or husbands’ gambling addiction.

It is also worth noting that the composition of the Appeals Court has recently changed. One of the two new judges, Madeline Singas, was previously appointed as a special prosecutor by Governor Cuomo to investigate allegations that former State Attorney General Eric Schneiderman abused four women.

Very interesting case all around and the clock is ticking. We are less than 30 days away from the oral arguments. In the meantime, if you are wondering how we got here, here comes the never-before-told story of the New York DFS case. 

Continue to Part II