AG settles with DraftKings, FanDuel for $12M

The state attorney general inked a $12 million settlement Tuesday with fantasy sports Web sites DraftKings and FanDuel.

The two companies will pay $6 million each for false-advertising violations, AG Eric Schneiderman revealed in announcing the settlement with the two sites, which he has been targeting for the past year. They have also agreed to change their marketing practices and inform consumers about expected winnings and rates of success.

“Today’s settlement makes it clear that no company has a right to deceive New Yorkers for its own profit,” Schneiderman said.

The deal resolves lawsuits filed by the AG in 2015 over alleged deceptive promotions. A state probe had found that the companies misled novice players about their odds as compared with their professional counterparts’ and gave false statistics about the difficulty of winning cash prizes.

The settlement comes after the state legalized daily fantasy sports contests in August. Once valued at more than $1 billion each, the sites are now struggling to pay their bills amid numerous state regulatory investigations and questions about their legality.

A spokeswoman for DraftKings said, “We are pleased to move forward as our business continues to grow.”

A rep for FanDuel said, “As previously stated, the negotiations were tough but fair, but 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.”