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New York court allows daily sports fantasy websites to continue operating

[JURIST] The Appellate Division of the New York State Supreme Court [official website] granted the two largest daily fantasy websites a stay on Monday allowing them to continue to operate within the state during their appeal. The appeal comes in a challenge from New York's attorney general Eric Schneiderman, who claims that FanDuel and DraftKings [official websites] are illegal gambling operations that should cease operations within the state, give back the proceeds made within the state, and pay a fine. The panel of five judges sided [NYT report] with the daily fantasy websites, finding that forcing the companies to shut down during a lengthy appeal would cause "irreparable harm." In December, an appellate court judge granted a temporary stay [JURIST report] to both FanDuel and DraftKings hours after a New York Judge ordered a temporary injunction demanding the companies cease operations within New York.

Gambling is heavily regulated federally and on the state level. In August 2012 a judge for the US District Court for the Eastern District of New York ruled [JURIST report] that a poker game operator could not be tried under a federal gambling law because poker is more a game of skill than a game of chance. In December 2011 the US Department of Justice clarified its stance on online gambling [JURIST report] in a memorandum opinion holding online non-sports related gambling that crosses state or international borders is not covered by the Wire Act of 1961. In November of that year, New Jersey passed Public Question 1 [JURIST report] by a 65 percent margin, amending the New Jersey constitution [text] to legalize sports gambling, but earlier this month professional and college sports leagues filed a lawsuit against the state [JURIST reports] seeking to enjoin the law as a violation of the Professional and Amateur Sports Protection Act.

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