Wednesday, the New York attorney general’s office issued a subpoena to Yahoo as part of its recent crackdown on the business of daily fantasy sports, according to multiple reports.
The subpoena, first reported by The New York Times, speaks that Attorney General Eric Schneiderman has expanded his investigation beyond a recent action of issuing cease and desist orders to industry leaders FanDuel and DraftKings. Previously, Schneiderman spoke of the two by saying they were “nothing more than a rebranding of sports betting,” and “plainly illegal,” in a court filing.
The websites allow users to make virtual teams of real-life players in their respective sports, with the chance to win large sums of cash prizes given the players perform well. Unlike your traditional fantasy sports league, which lasts the duration of the season, daily fantasy sports contest’s conclude at the end of the day.
Critics like Schneiderman have argued these sites provide a means of gambling because of the aforementioned. The websites say they are hosting games of skill, rather than chance — a common element of gambling.
A source revealed to USA TODAY on Wednesday that Schneiderman feels no different about Yahoo’s brand of daily fantasy sports. Yahoo has for years been known to run popular season-long fantasy sports products, but this summer took the dive into daily fantasy sports this past summer.
Paul Charchian, president of the Fantasy Sports Trade Association, spoke to members who support Yahoo’s product, in an effort to alleviate concerns they were supporting FanDuel and DraftKings legal matters in New York.
“They are dues-paying members who have not participated in any wrongdoing. More importantly, they are blazing a trail that benefits almost all of our membership,” Charchian wrote. “All of our smaller daily fantasy members are benefitting from DraftKings and FanDuel. They’re the companies who are being targeted, not the small guys. And they’re the ones who are paying the legal and lobbying costs to ensure that daily fantasy remains viable throughout the U.S.”
Charchian said he has had conversations with assistant attorney general Justin Wagner about the state’s position. He revealed that Wagner indicated the state is focusing on sites which run daily fantasy, not season-long league’s, but continued by saying Wagner made it clear that all daily fantasy sports sites were “on notice,” and should consider themselves in the same position’s as DraftKings and FanDuel.
“Yahoo does not comment on legal matters,” Yahoo said in a statement. “We are monitoring industry trends and events closely and believe that we offer a lawful product for our Daily Fantasy Sports users.”
It is believed that Yahoo was not immediately targeted like the other two powerhouses because of an alleged insider trading scandal between the two companies. After employees were accused of taking advantage of user data to place bets, the FBI launched an investigation. Several lawsuits were filed, including one by Washington Redskins receiver Pierre Garcon.