Fantasy sports companies FanDuel and DraftKings have been hindered the New York attorney general, who claims the services constitute illegal gambling.
FanDuel, a company founded in Scotland with 250 people working across its Glasgow and Edinburgh offices, operates in the US allowing sports fans to draft their idealised teams in the NFL, NBA, MLB and the NHL, was issued a cease-and-desist order earlier this week.
Similarly, DraftKings, a company based in Boston and founded in 2012 which enables players to earn money based on the on-field performance of their drafted team, received a New York state ban too.
The New York Times reports that the restriction will strike a blow to the start-ups riding the wave of the booming multi-billion dollar gambling industry.
New York AG Eric T. Schneiderman, said: “It is clear that DraftKings and FanDuel are the leaders of a massive, multibillion-dollar scheme intended to evade the law and fleece sports fans across the country.
“Today we have sent a clear message: not in New York, and not on my watch.”
The firms have long contended that their brand of competition is not gambling due to a lessened emphasis on chance and more on skill and sport knowledge. Ultimately, this argument fell short of protecting the industry in this sole case although FanDuel and DraftKings can appeal the decision.
FanDuel issued a statement, it read: “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.”
FanDuel in particularly is looking to expand its business to the UK in a move inclined to lessen its reliance on the US market.