DraftKings and FanDuel Withdraw Paid DFS Contests In Idaho
Idaho has joined the ranks of those U.S. states that have stopped paid daily fantasy sports contests from running within their state limits. Idaho’s Attorney General Lawrence Wasden announced last week that an agreement has been reached with two leading daily fantasy sports (DFS) companies, DraftKings Inc. and FanDuel Inc under which they will cease to offer paid contests to consumers in the state of Idaho.
The agreement was reached after three months of negotiations and made effective from May 1. Discussions were initiated after the Attorney General declared that paid DFS contests were illegal as per Idaho state law.
In a statement, Attorney General Wasden said
The concern I have is that the paid daily sports offerings provided by these companies constitute gambling under Idaho law. I have a duty to enforce and uphold that law. I commend the companies for negotiating in good faith and agreeing not to make these contests available in Idaho.
Wasden reviewed the offerings of the companies in January and concluded that the paid contests were gambling. According to Idaho gambling laws, gambling is defined as risking money for results that depend wholly or partly on luck, or on an outcome of any event, including sporting events. Wasden said that participants in paid DFS contests risk money to win a cash prize that depends on the performance of athletes, and therefore can be considered as gambling under current state laws.
The agreement has enabled the companies to avoid an admission of liability or any wrongdoing. They can continue offering free contests in the state but the companies will use geo-blocking technology or IP addresses to block residents of Idaho from accessing their sites for paid contests.
According to the terms of the agreement, the companies can resume the contests in case they become legally acceptable, such as when the Idaho Legislature modifies the state law to allow such contests or a court with jurisdiction in Idaho rules in favor of these games. The companies are allowed to resume the contest at any time but company representatives have agreed to provide a notice of 30 days to enable the state’s Attorney General to evaluate if the contests are in compliance with state law.
The legality of DFS has been a subject of intense debates in the U.S as a number of states have declared that these DFS games constitute gambling based on state laws and hence must be ruled illegal. As of now, twelve states across the United States have ruled paid DFS games as illegal while three states have declared them to be legal.
Concerns have been raised regarding FanDuel’s financial potential to stay afloat after being prohibited from offering paid contests by numerous
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