Q&A: Can I still play DraftKings, FanDuel in New York?

ALBANY – The future of daily fantasy sports in New York is in doubt after an appeals court ruled Thursday that the games violate the state constitution's gambling ban.

As of Friday, companies like FanDuel and DraftKings were still allowing New York users to enter their contests, which award cash prizes to winning users who compile a roster of professional athletes that perform on a given day or week.

But the ruling Thursday from the state Appellate Division, Third Department, significantly clouds their future in New York, throwing into doubt whether a 2016 law allowing the contests will hold up.

Here's a look at how it all went down and what happens next:

How did we get here?

Daily fantasy sports gained popularity in the early 2010s.

FanDuel and DraftKings quickly became the two giants of the industry, offering thousands of different contests that allow people to pay to enter and select a roster. By 2015, about 10 percent of their users were from New York.

But they were operating under cloudy legal circumstances in the state, whose constitution specifically prohibits gambling. The only exceptions are for things like the state lottery, bingo, horse racing and up to seven private casinos.

In 2015, then-state Attorney General Eric Schneiderman stepped in, ordering FanDuel and DraftKings to stop taking entries in New York. In 2016, the state Legislature passed a law that allowed and regulated daily fantasy sports, deeming them a "game of chance" that complied with the constitution.

DraftKings, FanDuel and other daily fantasy companies have been operating in New York ever since. 

When did the courts get involved?

After the law passed in 2016, Stop Predatory Gambling — a national anti-gambling group — funded a lawsuit challenging the daily fantasy sports law.

The lawsuit, led by Albany-based attorney Cornelius Murray, made the case that daily fantasy sports contests violate the constitutional gambling ban, which specifically prohibits non-state lotteries and "pool-selling, book-making, or any other kind of gambling."

Most DraftKings and FanDuel contests require an entry fee and result in cash payouts based on how the athletes perform.

How have the courts ruled?

So far, two courts have found daily fantasy sports contests run afoul of the constitution. 

In October 2018, Acting Supreme Court Justice Gerald Connolly of Albany ruled daily fantasy sports violate the constitutional gambling ban. But he allowed a portion of the 2016 law — a measure that removed penalties for offering daily fantasy sports contests — to stand. 

That split ruling raised the possibility that DraftKings, FanDuel and other fantasy companies would be allowed to offer their contests unregulated since they wouldn't face any criminal penalties.

But on Thursday, the Appellate Division issued a stronger ruling, upholding the lower court's finding that the law violates the gambling ban but also throwing out the measure erasing the penalties.

And in a final blow to daily fantasy sports supporters, the appeals court specifically allowed this line in the law to stand: "The conduct of unregistered interactive fantasy sports contests is prohibited."

Can I still play DraftKings and FanDuel in New York?

Yes, at least for the next several days. Then things get murky.

Connolly's original ruling was "stayed," which meant it wouldn't take effect while current Attorney General Letitia James appealed.

Under the court system's rules, that stay remains in effect for five days after the state is officially served with the ruling, which will likely happen early next week.

That means DraftKings, FanDuel and other daily fantasy operators can continue offering their games until that stay expires.

If James' office decides to appeal to the Court of Appeals, the state's highest court, it's likely the court will keep the stay in place. 

That would mean daily fantasy sports could continue until the Court of Appeals hears the case and renders its decision, a process that would take months.

FanDuel expects that to happen, according to a statement from the company.

“We expect that there will be an appeal and we’ll be able to continue to offer contests while that appeal is decided," the statement read.

A spokesperson for James said the Appellate Division's decision remains under review, as did the state Gaming Commission, which regulates daily fantasy sports.

Jon Campbell is a New York state government reporter for the USA TODAY Network. He can be reached at JCAMPBELL1@Gannett.com or on Twitter at @JonCampbellGAN.

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