DraftKings and FanDuel allowed to continue operating in New York (for now)

As daily fantasy sports websites DraftKings and FanDuel enter a protracted battle with the New York Attorney General regarding whether their practices constitute “gambling” and are therefore illegal in the state, they have at least an initial victory under their belts. ESPN reports that after Attorney General Eric Schneiderman won a temporary injunction to force the companies to cease doing business in the state, an appellate court judge granted an emergency temporary stay.

Although the stay is likely for the end of the year, this means that both DraftKings and FanDuel can continue doing business in New York — one of the prime locations for daily fantasy play.

For FanDuel, this means re-entering New York after pulling all business there in mid-November despite the fact that its headquarters are right in the city. The Boston-based DraftKings, on the other hand, chose to stay open and will continue practicing with the granted stay.

Although the temporary injunction is a win, both companies still have an uphill battle ahead of them. Justice Manuel Mendez, who granted the stay, did not disagree that DraftKings and FanDuel are operating illegally within New York. But there is a possibility that New York State laws might catch up: two bills introduced by New York Assemblyman Dean Murray could make daily fantasy legal in the state, but they’re unlikely to go into effect before the companies are no longer granted the protection of the stay.

The issue goes beyond both companies and the thousands of people who play within New York every day — it also involved the sports leagues themselves, some of whom own an equity stake in these companies. It will be interesting to see whether the influence of the NBA, MLB, NHL and NFL will sway the political climate enough to keep daily fantasy alive in New York.

But until then, at least for now, it’s business as usual.

➤ DraftKings, FanDuel granted emergency stay to continue in N.Y. [ESPN]