DraftKings, FanDuel will pay $12M to re­solve N.Y. suits

State al­leged il­le­gal gam­bling, false advertising

Daily Freeman (Kingston, NY) - - STATE NEWS - By David Klep­per

DraftKings and FanDuel will pay $6 mil­lion apiece to New York state to re­solve law­suits al­leg­ing the daily fan­tasy sports com­pa­nies en­gaged in false advertising un­der a le­gal set­tle­ment an­nounced Tues­day by state At­tor­ney Gen­eral Eric Sch­nei­der­man.

The deal ends a le­gal fight that saw FanDuel and DraftKings briefly halt op­er­a­tions in New York ear­lier this year af­ter Sch­nei­der­man said their busi­ness amounted to il­le­gal gam­bling. Sch­nei­der­man’s of­fice also ac­cused the two com­pa­nies of mis­lead­ing play­ers about po­ten­tial win­nings ad­ver­tise­ments and mar­ket­ing ma­te­rial. Tues­day’s set­tle­ment re­solves those claims.

Un­der the terms of the agree­ment, FanDuel and DraftKings will agree to re­vise the terms and con­di­tions dis­closed to play­ers and post in­for­ma­tion about ac­tual win­nings on­line.

“To­day’s set­tle­ments make it clear that no com­pany has a right to de­ceive New York­ers for its own profit,” Sch­nei­der­man said in a state­ment an­nounc­ing the deal. “DraftKings and FanDuel will now be re­quired to op­er­ate with greater trans­parency and dis­clo­sure and to per­ma­nently end the mis­rep­re­sen­ta­tions they made to mil­lions of con­sumers.”

FanDuel and DraftKings agreed to cease op­er­a­tions in New York pend­ing the pas­sage of new reg­u­la­tions al­low­ing them to op­er­ate. Law­mak­ers passed leg­is­la­tion this year Gov. An­drew Cuomo, a Demo­crat, signed it into law in Au­gust. That al­lowed the com­pa­nies to re­sume op­er­a­tions. Tues­day’s agree­ment re­solved the state’s law­suits al­leg­ing false advertising.

Both New York-based FanDuel and Bos­ton­based DraftKings con­firmed the set­tle­ment in state­ments to The As­so­ci­ated Press. FanDuel spokes­woman Jus­tine Sacco said the ne­go­ti­a­tions with Sch­nei­der­man’s of­fice were “tough but fair.”

“We are very pleased to have reached a res­o­lu­tion as this al­lows us to fo­cus on our busiest time of year with NFL, NHL and soc­cer in full swing, and NBA sea­son start­ing tonight,” she said.

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