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Daily fantasy sports has survived a 2016 lawsuit that would have declared interactive fantasy games unconstitutional under New York state law.
The New York Court of Appeals affirmed the constitutionality of DFS on Tuesday in a 4-3 decision in White v. Cuomo.
The decision by the state’s highest court affirmed the state’s assertion that DFS contests are “lawful skill-based competitions for prizes under our precedent” — effectively mooting plaintiff arguments that DFS violates constitutional prohibitions on gambling.
“Today, we clarify that the historic prohibition on ‘gambling” (under the constitution) does not encompass skill competitions in which participants who exercise substantial influence over the outcome of the contest are awarded predetermined fixed prizes by a neutral operator,” Chief Judge Janet DiFiore wrote for the majority.
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Brief History Of New York’s DFS Challenge
The long-awaited decision struck down a Feb. 2020 lower court ruling that declared New York’s 2016 DFS law unconstitutional based on a “material degree of chance” in DFS contests.
The case was filed in late 2016 by four New York residents, who claimed the element of chance in DFS violated the state constitution’s prohibition on gambling. New York state lawmakers had specifically excluded DFS from the definition of gambling in the state penal code to avoid a constitutional challenge, NY Sports Day reported on Feb. 8.
Legal challenges began soon after the legislation was signed into law that year.
Had the Court of Appeals decided in favor of the plaintiffs, the continuation of DFS in New York would have likely required a constitutional amendment.
That, say some commentators, could have halted DFS in New York until at least Nov. 2023.
