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  • Writer's pictureGrace Mason

NY Court of Appeals Hears Challenge to State's Fantasy Sports Law

A six-judge panel heard arguments in the case on Tuesday, with Judge Michael Garcia recusing himself, according to a court spokesman.

Government attorneys defended New York’s fantasy sports law before the state Court of Appeals on Tuesday in the latest stage of a legal fight over whether or not the activity should be considered gambling.

The case centers on a 2016 law that set up consumer safeguards and established a scheme for the registration and taxation of fantasy sports, in which players form teams of real-world athletes and vie against each other based on how well their roster performs.

State attorneys argue that interactive fantasy sports involve both chance and skill and thus cannot be considered gambling. In a court brief, the government argued that state lawmakers concluded that because a person selects their fantasy roster, they have control over the outcome.

In the law, the Legislature declared that “interactive fantasy sports are not games of chance.”

During arguments before the state Court of Appeals, Judge Eugene Fahey equated fantasy sports to simply betting on whether a team will win a game rather than a show of skill. He also rejected the idea of comparing the stock market to sports gambling, saying it is “an exercise in sophistry.”

“It’s almost an Orwellian argument. It’s like saying from ’1984′, ‘War is peace. Freedom is slavery. Fantasy sports is not gambling. It’s really like the stock market.’ Those things are directly contrary,” Fahey said on the bench.

A six-judge panel heard arguments in the case on Tuesday, with Judge Michael Garcia recusing himself, according to a court spokesman. Judge Jenny Rivera, who has reportedly not yet received a COVID-19 vaccine, appeared remotely.

Plaintiff Jennifer White, whose father racked up more than $500,000 in gambling losses over a decade, sued ex-Gov. Andrew Cuomo and the State Gaming Commission over the law, saying it violated the state constitution’s anti-gambling provision. New York’s constitution states that there should be “no lottery or the sale of lottery tickets, pool-selling, bookmaking, or any other kind of gambling” outside state-run lotteries and other exceptions.

Attorney Rob Rosborough, a partner at Whiteman Osterman & Hanna, said the case could help show how much leeway the court’s newer judges are willing to give the state Legislature on enacting policies that are not flagrantly unconstitutional.

“It could definitely go three-three,” Rosborough said of the vote. If that happens, the court would bring in another judge and hold re-arguments in the case, he said.

In a court brief, White and other plaintiffs argue that “instead of prohibiting gambling as mandated by the Constitution, the Legislature has done precisely the opposite.”

“They contend that interactive fantasy sports is nothing more than a poorly disguised version of ‘sports gambling,’ which the Legislature conjured up in an effort to circumvent the constitutional prohibitions,” the plaintiffs argue.

A state Supreme Court found that fantasy sports violated the state constitution’s anti-gambling provision. The court found that interactive fantasy sports “involves, to a material degree, an element of chance.”

The Appellate Division, Third Department agreed with the ruling, saying that while people might use their skill to select a fantasy team, they “cannot control how the athletes on their [Interactive Fantasy Sports] teams will perform in the real-world sporting events.”

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