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From Antitrust Law Daily, January 12, 2016

Injunctions against DraftKings and FanDuel stayed, pending appeal

By Linda O’Brien, J.D., LL.M.

Preliminary injunctions barring fantasy sports websites DraftKings, Inc. and FanDuel, Inc. from operating in the State of New York were stayed by the New York Supreme Court, Appellate Division, pending appeal. The New York Attorney General had brought claims of deceptive acts and practices and false advertising against the companies on the grounds that their operations constituted gambling under New York law (New York v. FanDuel, Inc., January 11, 2016, Friedman, D.).

The New York Attorney General’s office opened an investigation into DraftKings and FanDuel in October 2015, concluding that both companies’ operations constituted illegal gambling. Cease and desist letters were sent to both DraftKings and FanDuel, charging that the companies’ advertisements seriously misled New York citizens concerning their prospects of winning.

In November, the New York Attorney General filed suit against DraftKings and FanDuel, alleging violations of New York General Business Laws §§ 349 and 350 for deceptive acts and practices and false advertising. In December, the trial court granted Attorney General Eric T. Schneiderman’s motion for preliminary injunction against both companies. The court also denied the companies’ motions for preliminary injunction, which sought to prohibit the Attorney General from taking any enforcement action against the two companies. Subsequently, DraftKings and FanDuel appealed. Before the court were the two companies’ motions for a stay of the orders pending hearing and determination of their appeals.

The appellate court granted DraftKings and FanDuel’s motions for a stay on the condition that the appeals were perfected for the May 2016 terms.

The cases are Nos. M-6204 and M-6206.

Attorneys: Eric T. Schneiderman, Attorney General of the State of New York, for The People of the State of New York. Randy M. Mastro (Gibson Dunn & Crutcher LLP) and David Boies (Boies, Schiller & Flexner LLP) for DraftKings, Inc. John S. Kiernan (Debevoise & Plimpton LLP) for FanDuel, Inc.

Companies: DraftKings, Inc.; FanDuel, Inc.

MainStory: TopStory Advertising StateUnfairTradePractices NewYorkNews

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