DraftKings, FanDuel agree to call it quits in New York

The billion-dollar startups hope state legislators will enable their return by legalizing fantasy sports

DraftKings FanDuel
From left: 300 Park Avenue South and 400 Lafayette Street (inset: Eric Schneiderman)

DraftKings and FanDuel have agreed to pull out of New York, but are pinning their hopes on state legislators for a comeback.

The billion-dollar fantasy-sports startups have shut down in their largest market as part of a settlement agreement with the state Attorney General’s office, the Wall Street Journal reported. The companies, however, would reopen if state legislators were to legalize fantasy sports.

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“We will continue to work with state lawmakers to enact fantasy-sports legislation so that New Yorkers can play the fantasy games they love,” DraftKings said in a statement.

The settlement comes four months after Attorney General Eric Schneiderman ordered the companies to cease operations, alleging that they provided illegal gambling services. In December, a New York State Supreme Court judge issued a preliminary injunction barring the companies from operating in the state. The fantasy sports giants were later granted a temporary stay to continue running through the end of 2015.

Despite its trouble with the Attorney General’s office, FanDuel insisted in January that it would stay put at its new 41,000-square-foot office at Rockrose Development’s 300 Park Avenue South. Meanwhile, Boston-based DraftKings decided to sublease its 23,500-square-foot space at Alvin Flaster’s 400 Lafayette Street in Noho just a few months after inking the lease. The site said its decision to sublease had nothing to do with its legal woes. [WSJ] — Kathryn Brenzel