ALBANY, N.Y. — A state judge on Friday barred DraftKings and FanDuel, the nation's two largest daily fantasy sports companies, from doing business in New York state.
Supreme Court Justice Manuel Mendez issued an injunction, sought by Attorney General Eric T. Schneiderman, suspending the companies' operations in the state.
Schneiderman, a Democrat, has filed a civil lawsuit to shut down the companies, calling them illegal gambling operations. The companies claim they offer games of skill, not chance, and are, therefore, legal. He had requested a preliminary injunction pending the outcome of the lawsuit.
By granting the injunction, Mendez noted that Schneiderman has a likely chance of winning his civil claim against the companies.
"The (attorney general) has established the likelihood of success warranting injunctive relief," Mendez wrote in a 12-page decision. But he later warned that "granting or denial of a preliminary injunction does not constitute a determination of the ultimate issues."
Schneiderman said in a statement, "We are pleased with the decision, consistent with our view that DraftKings and FanDuel are operating illegal gambling operations in clear violation of New York law. I have said from the beginning that my job is to enforce the law, and that is what happened today."
DraftKings said it would request an immediate, emergency appeal to prevent a shutdown.
"We are disappointed with the court's decision, and will immediately file an emergency notice of appeal in order to preserve the status quo," spokesman Ben Spicehandler said in an email. "Daily Fantasy Sports contests have been played legally by New Yorkers for the past seven years and we believe this status quo should be maintained while the litigation plays out."
The companies had argued that shutting them down before the lawsuit was resolved would devastate their businesses. Mendez disagreed and said that had to be balanced with other concerns.
"The balancing of equities are in favor of the NYAG (Schneiderman) and the state of New York due to their interest in protecting the public, particularly those with gambling addictions," Mendez wrote.
New York-based FanDuel and Boston-based DraftKings control about 95 percent of the daily fantasy sports market, officials have said. FanDuel didn't immediately comment on Mendez's decision.