Daily fantasy, the former red-hot darling of the gaming world, received its latest blow on Friday, when a New York supreme court judge upheld state attorney general Eric Schneiderman’s order that FanDuel and DraftKings be barred from the state.
Schneiderman has argued that daily fantasy constitutes sports betting, which is illegal in New York. A ban in the Empire State, however, isn’t the only thing that’s bad for daily fantasy’s business. The legal argument from the companies could prove even more damaging.
DraftKings hired David Boies, the most famous litigator in the country, to defend its business model — but in doing so, he couldn’t help but undercut their brand. The argument for the legality of daily fantasy in New York says the activity is fundamentally a game of chance — gambling — or a game of skill. In the company’s legal filings for the New York case, Boies cited a study published in the Sports Business Daily by an MIT-trained engineer at McKinsey which found that just 1.3% of players won 91% of contest winnings in the first half of the 2015 MLB season. “If most people lose money and the same people continue to win repeatedly,” Boies has said, “that is absolute proof that this is a game of skill and not of chance.”
In other words, you’ll likely lose money playing our game! Surprisingly enough, the companies weren’t touting this message during their irritating ad blitz back at the start of the NFL season. Those commercials, in which seemingly average Joes either celebrated or talked about their hefty winnings, preached accessibility. This could be you. Sign up and win.
That was the pitch for the masses. DraftKings presented something entirely different to the courts. No matter the final verdict in the New York case — the companies said they would appeal — Schneiderman’s injunction has laid bare the business model. The daily fantasy pros will eat you alive.
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Write to Sean Gregory at sean.gregory@time.com