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New York wins battle with fantasy sports, but the war isn't over

A New York state judge effectively shut down FanDuel and Draft Kings in the state Friday. But that's not likely to be the last word.

A New York Supreme Court judge ruled Friday against FanDuel and Draft Kings in the latest front in the state-by-state war against the popular fantasy sports betting sites.

In recent years, fantasy sports games have become a bona fide phenomenon, but some in law enforcement see them as little more than a newer form of illegal gambling.

On Friday, Judge Manuel Mendez granted an injunction sought by New York Attorney General Eric Schneiderman, which effectively brings the fantasy sports betting industry to a halt in the state. 

"The balancing of the equities are in favor of the NYAG and the state of New York due to their interest in protecting the public, particularly those with gambling addictions," Judge Mendez wrote in his decision. According to Bloomberg Business, the New York market, worth an estimated $35 million, accounts for 13% of the country's fantasy betting, making it the largest market in the country.

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Still, despite the judge's ruling, New York lawmakers have already predicted a compromise is inevitable. "If the court rules it's illegal, we'll do something probably to legalize it," Democratic Assemblyman J. Gary Pretlow, who leads the Committee on Racing and Wagering, told the Associated Press prior the decision.

Nevada has previously determined that the activities of sites like FanDuel and Draft Kings falls under their definition of illegal gambling. And states like California and Massachusetts are doing investigations of their own into whether to derail the sites' operations in their backyards.

At issue in the debate is whether fantasy sports betting is a game of chance or whether it requires skill. Defenders of sites like FanDuel and DraftKings, companies which both value themselves in the billion-dollar range, claim the latter.

"Unlike games of chance in casinos, which the attorney general somehow defends as less “harmful,” and unlike bets on individual games or players, daily fantasy sports competitions are decided by who does the best job of selecting his or her fantasy team," David Boies, a lawyer for DraftKings, wrote in an op-ed last month in the New York. "Although he may not appreciate it, the [New York] attorney general himself recognizes the dominant role that skill plays when he writes that less than 1% of the players repeatedly win almost all of the prizes."

Some prominent sports figures, like the popular New York broadcaster Mike Francesa have disagreed.

“It’s a straight wager. They are setting up a bet between me and someone else,” Francesa said in a heated 14-minute debate with a local Republican lawmaker who supporters the sites. “It’s legal bookmaking. That’s all it is.”

Despite the controversy, pro sports leagues have warmed up to fantasy betting, while, with the exception of NBA Commissioner Adam Silver, maintaining an opposition to old fashioned sports gambling. As states take their own individual stands about the legality of the fantasy sports sites, whether they can continue in locations where they have been banned may need to be determined on a federal level.