Thursday, December 24, 2015

Fantasy Sports - Busted in Illinois

    Yesterday, the Attorney General (AG) of the State of Illinois released an opinion that Daily Fantasy Sports constitute gambling under Illinois law (Opinion).

     There are two notable elements to this opinion.

     First, the AG directly addresses FanDuel's and DraftKings' claim that under the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA) fantasy sports are legal (see Opinion at 3-5).  While the UIGEA does exclude from the definition of "bet or wager" the participation in fantasy sports games, the AG points out that the UIGEA does not preempt existing state laws regulating gambling. 

     Second, the definition of gambling under Illinois State law covers both games of chance and games of skill (see Opinion at 6-8).  Thus, FanDuel's and DraftKings' second flagship argument -- that fantasy sports is a game of skill and thus cannot be gambling -- collapses.

     We should expect that FanDuel and DraftKings will mount legal challenges to the AG's Opinion, and will lobby the Illinois legislature to change the law.

 - HP

Friday, December 18, 2015

Privacy - Opting Out

     It is in basically every website’s Privacy Policy, or it should be.  A statement that you can “opt out” from online behavioral advertising, which means presenting you with online advertisements based on information collected about you that is more likely to be relevant to you.

     Opting out of online behavioral advertising does not stop online advertising.  You will still be presented with advertisements, just not advertisements based on your information.

     Nor, does opting out of online behavioral advertising affect what advertisers care deeply about – their ability to collect information about you.  They can still track and collect more information about you.

     One key point is that your decision to opt out of online behavioral advertising is recorded using cookies.  So if you ever reset your browser and its cookies, then you will have to re-opt out of online advertising.

     If you would like to opt out, there are two major voluntary organizations that most advertisers are part of:  (1) the DAA (Digital Advertising Alliance) and (2) the NAI (Network Advertising Initiative).  Here are links to their opt out pages:  DAA opt out page and NAI opt out page.

- Henry Park

Wednesday, December 16, 2015

Happy Holidays

May your Holidays be filled with family and friends.  Best wishes for a successful and prosperous 2016.

- Henry Park

Sunday, December 13, 2015

Fantasy Sports - Down but not out

     On December 11, 2015, Justice Manuel J. Mendez ruled on the New York Attorney General's motions for injunctive relief to bar FanDuel, Inc. and DraftKings, Inc. from offering daily fantasy sports to New York residents.  FanDuel Order (linked at and DraftKings Order (linked at

     On a motion for injunctive relief, the NYAG needed to show that (1) it was likely to succeed on the merits, (2) irreparable injury absent the injunction, and (3) that the balance of equities favors the NYAG.  Unlike most motions for preliminary injunctions that try to maintain the status quo, these motions sought to stop the defendants business.  In any case, the grant of a motion for injunctive relief is not typical and should not be given unless it is necessary. 

     Justice Mendez found that the NYAG established that it was likely to succeed under its claim for injunctive relief for repeated fraudulent conduct or illegality (Executive Law § 63), and for violations of consumer protection provisions (General Business Law §§ 349 and 350). Order at page 9, linked from  Justice Mendez also found that the NYAG had even a greater likelihood of success under its claims that daily fantasy sports are illegal gambling (New York State Constitution Article I, § 9 and Penal Law § 225.00).  Order at page 9.

    Some key preliminary findings by Justice Mendez were that (1) Penal Law § 225.00 refers to a person "risk[ing] something of value" and not a wager or bet, and (2) the Federal Unlawful Internet Gambling Enforcement Act of 2006 does not apply because the Act does not apply to transactions that are within a single State.  Order at page 7.

    Thus, Justice Mendez granted the NYAG's motions for injunctive relief.  With that order, both FanDuel and DraftKings would have to terminate any dealings with New York consumers (FanDuel previously stopped accepting money from New York consumers in November).  However, shortly after Justice Mendez granted the NYAG's motions, FanDuel appealed to the New York Supreme Court's Appellate Division and an interim stay order was granted and along with an order expediting briefing.  Stay Order at page 3.

     So where do these Court actions leave FanDuel and DraftKings?  There will be an expedited briefing and hearing at the appellate level on Justice Mendez's Order.  Following that decision, the case will return to Justice Mendez for discovery.  It is important to note that a decision on a motion for injunctive relief does not affect the ultimate legal determination.

- Henry Park

updated on 12/17 revised last paragraph