New York AG now wants daily fantasy sports companies to refund entry fees

TAGs: daily fantasy sports, DraftKings, Eric Schneiderman, fanduel, New York

new-york-ag-daily-fantasy-sites-refund-demandNew York’s attorney general now wants daily fantasy sports operators DraftKings and FanDuel to refund all the money that their New York customers lost playing on the sites.

On New Year’s Eve, New York AG Eric Schneiderman filed amended complaints (viewable here and here) against the two operators, seeking “an accounting of monies” the sites have collected from New York players.

The amended complaints also ask the court to order the operators to “disgorge all monies” and “make restitution of all funds obtained from consumers in connection with the fraudulent, deceptive and illegal acts” the AG believes the companies committed prior to his filing cease and desist orders in November. Schneiderman also wants the court to impose a $5k penalty on the operators for each violation of New York gambling laws.

DraftKings and FanDuel are believed to have collected around $200m in entry fees from around 600k New York DFS players in 2015. Schneiderman hadn’t made such a request in his original complaints, but it seems that the operators’ decision to defy his C&D order just may have rubbed the AG the wrong way.

The amended complaints take shots at each site’s welcome bonus promotions, which Scheniderman believes were administered in a manner “inconsistent with [the sites’] marketing claims and the expectations of a reasonable consumer.”

Schneiderman also goes after the sites’ marketing claims, including a DraftKings ad that cited $1,263 as the “average user’s winnings” for the past year. Schneiderman says this implied that the average user “could expect a positive return on the money wagered” when in fact the overwhelming majority of the site’s users ended up as net losers.

On Dec. 11, New York Supreme Court Justice Manuel Mendez granted Schneiderman’s request for an injunction against the two operators, but the companies obtained a temporary stay of that ruling the same day. An appellate panel will consider whether or not to lift that stay at a hearing on Monday, January 4.

Meanwhile, the DFS number crunchers at have shaken off their New Year’s hangovers long enough to turn in their analysis of the penultimate week of the 2015 NFL season.

After two straight weeks of declines, DraftKings enjoyed a boost in activity, with guaranteed prize pool (GPP) entry fees of $18.1m, up from $17.2m the previous week, while scoring an effective margin of 9.7%, more than twice the rate of the previous week.

FanDuel’s GPP and cash-game fees totaled just under $17.4m, down about $400k from the previous week, while its margins slipped from 10.8% to 10.15%. Coupled with DraftKings’ gains, the slump dropped FanDuel to #2 on SuperLobby’s NFL chart.

FanDuel can take comfort in knowing that it currently owns the DFS basketball charts. In the week spanning Dec. 16 – 22, SuperLobby says FanDuel’s NBA GPP and cash game fees came to $20.35m, while DraftKings’ NBA GPP fees were $13.64m.

FanDuel’s NBA fees are its second lowest this season, but its 10% margin still allowed it to bank $2m in revenue. DraftKings posted its second highest margin (10.8%) of the season, earning the site around $1.5m.


views and opinions expressed are those of the author and do not necessarily reflect those of