A New York judge has ruled that daily fantasy sports sites DraftKings and FanDuel must cease operations in the state for now.
New York Supreme Court Justice Manuel Mendez granted an injunction sought by Attorney General Eric Schneiderman after hearing arguments last month over whether the sites are conducting illegal games of chance or legal ones involving skill.
A DraftKings lawyer said the company would be filing for a stay of the decision. The Boston-based company plans to appeal.
The two privately owned companies are each valued at more than $1bn and the recent decision could be a major blow to the sites as both state and federal authorities determine whether or not their operations amount to gambling.
Both DraftKings and FanDuel have been criticized for their excessive advertising that promises large winnings. In October, the two companies made headlines when they were accused of insider trading after a DraftKings employee who won $350,000 during Week 3 of the NFL season at rival site FanDuel inadvertently released data that’s not generally available to the public.