New York Governor Signs Bill to Allow Daily Fantasy Sports
Game operators to pay fees, taxes; amended lawsuit to continue — ALBANY, N.Y.—Gov. Andrew Cuomo signed a bill into law Wednesday to allow the resumption of daily fantasy sports in New York. — The measure calls the popular online contests a “game of skill.”
Context & Ripple Effects
Daily fantasy sports in New York has run a nine-month arc from prohibition to legalization: the attorney general first declared DraftKings and FanDuel games illegal gambling in November 2015, a judge ordered them to cease operating that December, and after an amended suit sought to claw back player losses, the companies reached a settlement agreeing to stay out of the state until September pending new legislation.
That legislation arrived on schedule — lawmakers voted in June to legalize the contests, and Gov. Andrew Cuomo has now signed the bill into law, codifying DFS as a 'game of skill' with operators paying fees and taxes. The signing converts what was a courtroom fight into a licensed, taxed market.
First-order effects
- DraftKings and FanDuel can plan their return to New York ahead of the September deadline set in their settlement with the attorney general, now operating legally under the state's fee-and-tax regime instead of in litigation limbo.
- The amended lawsuit seeking returned profits and repaid user losses continues despite the new law, so both companies still face potential restitution exposure even as they regain market access.
Second-order effects
- The settlement-for-legislation template — operators trading a shutdown pause for a statutory fix — gives regulators in other states a playbook that ends contests over whether DFS is gambling by reclassifying it as skill.
- Compliance costs (fees, taxes, licensing) become a permanent line item for DFS operators in New York, pressuring smaller rivals who lack DraftKings and FanDuel's scale to absorb the same regulatory overhead.
Third-order effects
- If the skill-classification-plus-taxation model spreads, daily fantasy sports consolidates from a gray-market litigation battleground into a state-regulated industry where market access is granted by statute rather than contested case-by-case in court.
The trend: States are shifting daily fantasy sports from courtroom enforcement to statutory legalization, trading prohibition for fees, taxes, and a 'game of skill' label.