Alabama AG sends cease-and-desist letters to daily fantasy sports operators

alabama-attorney-general-daily-fantasy-sports-illegalAlabama’s attorney general is the latest to declare daily fantasy sports to be illegal gambling and to order the industry’s top operators to cease and desist.

On Tuesday, Alabama Attorney General Luther Strange (pictured) announced that he’d sent cease and desist letters to both DraftKings and FanDuel, ordering them to halt their real-money operations in his state as of May 1.

Strange said his office had concluded that DFS contests “are in fact illegal gambling under Alabama law.” The state defines illegal gambling as any contest in which participants risk something of value to win a prize, even if the activity in question involves a degree of skill.

Strange acknowledged that DFS involved some skill but said DFS players have no control over the performance of the athletes they have added to their DFS rosters, and thus the outcome of a DFS contest depends “to a large degree on chance,” which is “the very definition of gambling under Alabama law.”

Strange’s pronouncement follows similar rulings by AGs in Georgia, Hawaii, Illinois, New York, Mississippi, Texas and Vermont, all of whom have made their displeasure known since the DFS ‘data leak’ scandal broke last fall. Nevada has taken a slightly different tack, saying DFS is legal gambling but requiring operators to apply for gambling licenses. Combined with the states that already viewed DFS as illegal, a total of 12 states now deem DFS to be agin’ the law.

Neither DraftKings nor FanDuel responded immediately to Strange’s announcement. To date, DraftKings and FanDuel have not followed a strict pattern in their reaction to such rulings. The companies have generally shown a willingness to exit states from which they derive little revenue, while digging in their heels in more critical jurisdictions. It was only late last month that both operators agreed to leave New York, despite AG Eric Schneiderman having issued his C&D way back in November.