Figuerdo DFS Affirmation PDF

SUPREME COURT OF THE STATE OF NEW YORK
APPELLATE DIVISION: FIRST DEPARTMENT
THE PEOPLE OF THE STATE OF NEW YORK,

by ERIC T. SCHNEIDERMAN, Attorney General
of the State of New York,
Plaintiff-Respondent,
Index No. 453056/15

Supreme Court
New York County
-againstFANDUEL, INC.,
Defendant-Appellant.
Plaintiff-Respondent,
-against-
Index No. 453054/15

Supreme Court
New York County
DRAFTKINGS, INC.,
Defendant-Appellant.
AFFIRMATION OF VALERIE FIGUEREDO IN OPPOSITION TO

DEFENDANTS MOTION FOR AN INTERIM STAY
VALERIE FIGUEREDO, an attorney duly admitted to practice in the
courts of the State of New York, affirms the following under penalty of perjury.
1.
I am an Assistant Solicitor General in the Office of the New York
State Attorney General.
2.
The facts set forth in this affirmation are based on my personal
knowledge, on information and belief, and on information contained in the

investigative files of the Office of the New York Attorney General.
3.
The attached exhibits are true and correct copies of the specified
documents filed in Supreme Court, New York County in the indicated actions
(People ex rel. Schneiderman v. FanDuel Inc., Index No. 453056/2015 (People
v. FanDuel); (People ex rel. Schneiderman v. DraftKings, Inc., Index No.
453054/2015 (People v. DraftKings); DraftKings, Inc. v. Schneiderman, Index
No. 102014/2015 (DraftKings); FanDuel, Inc. v. Schneiderman, Index No.
161691/2015 (FanDuel) :
Ex.
Document
Complaint, People v. FanDuel, Inc., filed Nov. 17, 2015
Complaint, People v. DraftKings, Inc., filed on Nov. 17, 2015
Affidavit of Vanessa Ip, dated Nov. 6, 2015 (People v. FanDuel)
Affidavit of Vanessa Ip, dated Nov. 6, 2015 (People v. Draft

Kings)
Opinion, Attorney General of the State of Louisiana,

dated April 23, 1991
Petition, Draft Kings, Inc. v. Schneiderman, filed Nov. 13, 2015
Complaint, FanDuel, Inc. v. Schneiderman, filed Nov. 13, 2015
Walt Bogdanich & Jacqueline Williams, For Addicts, Fantasy

Sites Can Lead to Ruinous Path, N.Y. Times, Nov. 22, 2015
(attached to Affirmation of Justin Wagner, dated November 23,

2015)
I
Ed Miller & Daniel Singer, For Daily Fantasy Sports Operators,

The Curse of Too Much Skill, Sport Bus. J., July 27, 2015
(attached to Affidavit of Gregory B. Karamitis, dated Nov. 15,
2015) (DraftKings)
Affidavit of Timothy Dent, dated Nov. 15, 2015 (Draft Kings)
Affidavit of Gregory B. Karamitis, dated Nov. 15, 2015

(DraftKings)
Affidavit of Jason Robins, dated Nov. 23, 2015 (DraftKings)
Affidavit of Peter Jennings, dated Nov. 23, 2015 (DraftKings)
Affidavit of Dr. Abraham J. Wyner, dated Nov. 23, 2015 (Draft

Kings)
Christopher Palmeri, DraftKings, FanDuel Are Uber to Casinos

Eyeing Sports Bets, Bloomberg News, Oct. 1, 2015 (attached to
Affidavit of Justin Wagner, dated Nov. 16, 2015 (P. v.
DraftKings)
Eilers Research, LLC, Keynote: Bold Predictions on the Daily

Fantasy Sports Market, presentation to for the Fantasy Sports
Trade Association Winter Conference, dated Jan. 16, 2014,
(attached to Affirmation of Justin Wagner, dated Nov. 16, 2015)
(P. v. DraftKings)
Affidavit of Keith S. Whyte, dated Nov. 12, 2015 (P. v. FanDuel;

P. v. DraftKings) (attached to the Affirmation of Justin Wagner,
dated Nov. 16, 2015)
Affirmation of Dr. Jeffrey L. Derevensky, dated Nov. 12, 2015

((P. v. FanDuel; P. v. DraftKings) (attached to the Affirmation of
Justin Wagner, dated Nov. 16, 2015)
David Gonos, Using Vegas Lines to Help You Succeed in Daily
Fantasy Baseball, FanDuel Insider (attached to Affirmation of

Justin Wager, dated Nov. 16, 2015) (P. v. FanDuel)
T
Myles Udland, Fantasy Sports Companies Spend So Much on

Commercials Theyre Moving the Needle on TV Ad Spending,
Business Insider, dated Oct. 6, 2015 (attached to Affirmation of
Justin Wagner, dated Nov. 16, 2015) (P. v. FanDuel)
Affirmation of Justin Wagner, dated Nov. 16, 2015 (P. v.

DraftKings)
Dated:
New York, New York

December 22, 2015
By:
_____________________________
VALERIE FIGUEREDO
Assistant Solicitor General
INDEX NO. 453056/2015
FILED: NEW YORK COUNTY CLERK 11/17/2015 09:44 AM

NYSCEF DOC. NO. 2
RECEIVED NYSCEF: 11/17/2015

NEW YORK COUNTY
------------------------------------------------------------------------X
by ERIC T. SCHNEIDERMAN, Attorney General of the
State of New York;
COMPLAINT
Plaintiff,
Index No. _______
- against -
IAS Part ________

Justice ________
FanDuel, Inc.,
Defendant.
------------------------------------------------------------------------ X
The People of the State of New York, by their attorney, Eric T. Schneiderman, Attorney
General of the State of New York, allege, upon information and belief:
PRELIMINARY STATEMENT
1.
Fantasy sports is a game enjoyed and legally played by millions of people
nationwide, including in New York.

2.
In fantasy sports, players draft teams, set imaginary lineups, and score
points based on the performance of professional and amateur athletes in real games.
3.
FanDuel, Inc. (FanDuel) exploits the good will associated with this game.
Unlike the season-long competition played mostly for bragging rights or side wagers, FanDuel
runs a casino-style gambling operationdubbed daily fantasy sports (DFS)where bettors
can wager upwards of $10,000 per line-up and enter for a chance to win jackpots of up to $1
million.
4.
FanDuel uses advertisements to lure New York residents with promises of easy
riches for a lucky few sports fans. The company has spent over $75 million dollars this year
1
alone on ads urging FanDuels paying out over $2 billion dollars this year and anybody can
play, anybody can succeed.
5.
Other commercials promise: Even the novice can come in and spend 1 or 2
dollars and win 10, 20 thousand dollars.
6.
But FanDuel only offers a way to bet on existing sporting events, nothing more.
And its approach is not new: Bookmaking operations in jurisdictions with legal gambling like
Nevada have long accepted sports proposition or prop bets (to bet on game statistics and
milestones) and parlay bets (to simultaneously bet on several, independent variables in a single
wager).
7.
As one DFS CEO colorfully described it, DFS is like a sports betting parlay on
steroids. FanDuel specifically encourages DFS players to consult the Vegas betting odds for
athlete prop bets.
8.
The speed of FanDuels games, the size of their jackpots, and the degree to which
the games are sold as winnable have ensnared compulsive gamblers and threaten to trap
populations at greater risk for gambling addiction, particularly male college students. This has
prompted gambling addiction experts and advocates to sound the alarm.
9.
Until a major spike in ad spending this fall and a public scandal over the fairness
2
of its games, FanDuel managed to avoid serious scrutiny as a gambling business. As an

increasing number of states examine the companys business model, they are reaching the same
realization; Nevada, Georgia, Illinois, and Michigan, gaming officials have each declared DFS to
be gambling or have otherwise raised serious doubt about its legality.
10.
FanDuel does not offer games in Washington State (which has the same definition
of gambling as New York) and in four other states (Arizona, Iowa, Louisiana, and Montana).
When the Nevada Gaming Control Board recently determined that DFS qualified as gambling
under state law, the company suspended Nevada operations the same day.
11.
On November 10, 2015, the Office of the New York Attorney General (NYAG)
informed FanDuel that its business violated the law in New York Statewhich accounts for
approximately 5% of FanDuels active usersand must stop accepting wagers from New York.
The letter also served as formal pre-litigation notice, indicating that NYAG would commence an
enforcement action if FanDuel failed to abide by the law. It refused, choosing to file an improper
lawsuit during the notice period.
12.
The State therefore brings this action to enjoin the company from continuing to
operate an unlawful gambling business in New York.

JURISDICTION AND PARTIES
13.
Plaintiff People of the State of New York, by Attorney General Eric T.
Schneiderman, brings this action pursuant to Executive Law 63(12), Business Corporation Law
(BCL) 1303, and General Business Law (GBL) 349 and 350.
14.
Defendant FanDuel is a Delaware corporation, with its principal place of business
at 19 Union Square West, Ninth Floor, New York, New York 10003.
15.
This Court has jurisdiction pursuant to: (i) Executive Law 63(12), under which
the Attorney General is empowered to seek injunctive relief, restitution, disgorgement and
damages when a person or business entity engages in repeated fraudulent or illegal acts or
persistent fraud or illegality in the carrying on, conducting, or transacting of business; (ii) BCL
1303, which authorizes the Attorney General to bring an action to restrain a foreign corporation
from doing in this state without authority any business for the doing of which it is required to be
authorized in this state; and (iii) General Business Law 349(b), which authorizes the Attorney
General to seek injunctive relief, restitution, disgorgement and civil penalties when a person or
business engages in deceptive business acts and practices.
FACTS
I.
Traditional Fantasy Sports Gained Fans as a Friendly, Season-Long Competition
16.
Fantasy sports emerged in its modern form no later than the 1980s, starting
initially with baseball and football and later expanding to other sports.
17.
In traditional fantasy sports, participants create imaginary or fantasy teams
composed of real amateur and professional athletes. During the course of the regular season,
participants may adjust those fantasy teams and then score points depending on the real-world
performance of the athletes appearing on their fantasy teams.
18.
At the end of the season, all points are tallied and the team with the most points
19.
With the advent of the internet, traditional fantasy sports has exploded in
wins.
popularity.
20.
Websites run by ESPN, CBS Sports, and others made, and continue to make it
easy to run a fantasy league and compete against friends or colleagues. These websites host the
leagues, maintain records, tabulate points, and create a forum for interacting with other league
4
participants.
21.
Each traditional fantasy league typically designates a commissioner, i.e. one of
the participants who handles administrative issues, including registering with an internet host
site.
22.
While the precise format and rules vary from game to game, traditional fantasy
sports competitions share several common elements:

a.
A competitive draft. Prior to the start of sports season, participants draft
a team from athletes expected to play in a particular league (e.g., Major League
Baseball). The draft proceeds as either: (i) a round-robin snake draft, where the
last participant to select an athlete in one round gets the first pick in the next; or
(ii) an auction draftwhere each participant receives a set budget of credits with
which to bid, and each athlete goes to the highest bidder. In the typical version of
the game, each athlete can be drafted by only one team. Thus, each participant has
an incentive not only to pick the best available athletes for his own fantasy team,
but to pick athletes to block another team
b.
Trading, Dropping, Adding Players, and Setting Lineups. To be successful
over the course of a season, participants must actively manage their teams. This
includes negotiating athlete trades with other participants, dropping injured or
underperforming athletes, and adding free agents (athletes not on the roster of any
fantasy team). Such moves and adjustments can seek to add points to a
participants team or to deny them to another.
23.
By making moves over the course of a long season, participants can insulate
themselves to some degree from day-to-day variations in performance, can respond to player
injuries, trades, suspensions, and other unpredictable occurrences, and can otherwise seek to
improve their chances.
24.
To remain competitive in traditional fantasy sports, participants must adjust teams
and lineups throughout a season. No single game or week is determinative of a participants

success or failure.
25.
Depending on the host site, the participants can exert substantial control over how
the fantasy game is administered and scored. Among other changes, participants can often adjust
the scoring formats, the universe of players available for drafting, the size of each team, the free
agency rules, and the lineup requirements
26.
Most participants in traditional fantasy leagues do not participate in competitions
for major prizes or enter wagers through the fantasy league host sites.
27.
Mainstream sites that host traditional fantasy sports like ESPN and CBS Sports
have typically generated the bulk of their revenue from advertising and administrative fees.
28.
To the extent that traditional fantasy leagues involve wagers between participants,
with limited exceptions, mainstream host sites like ESPN and CBS Sports, do not participate or
profit from those bets.
29.
The Fantasy Sport Trade Association (FSTA), a trade association representing
companies like the Defendant, estimated that by 2008, about 30 million people played traditional
fantasy sports. Since then, the numbers of people who play traditional fantasy sports has
continued to climb.
30.
The sweeping majority of participants in traditional fantasy sports compete solely
for bragging rights or side wagers.

II.
An Internet Gambling Prohibition Inspires a New Form of Internet Gambling
31.
In 2006, the U.S. Congress passed the Unlawful Internet Gambling Enforcement
Act (UIGEA) to expand the mechanisms available to federal prosecutors seeking to enforce
anti-gambling laws against internet-based gambling companies. This statute primarily introduced
new consequences for financial institutions that process illegal gambling transactions.
32.
UIGEA explicitly left all other federal and state gambling laws intact, and
provided that: No provision of this subchapter shall be construed as altering, limiting, or

extending any Federal or State law or Tribal-State compact prohibiting, permitting, or regulating
gambling within the United States.
33.
In 2008, an online betting entrepreneur named Nigel Eccles and a few partners
founded the online wagering platform Hubdub. That site let users bet on the outcome of news
events. As a former employee at two online gambling companies in the U.K., Eccles reportedly
saw potential in combining the fun and excitement of online gambling with the mass interest in
news. As Eccles put it, the idea was to gamble on what you believe will happen. You can bet
on any subject under the sun.
34.
Hubdub, however, had a fatal flaw: Because UIGEA made processing wagers
involving real money illegal in the United States, the site operated with virtual currency. This
apparently provided insufficient excitement for bettors, and the news-betting component folded a
few years later.
35.
Reviewing UIGEA, however, Eccles seized on language that excluded certain
fantasy sports and simulations from the definition of bet or wager. Although previously not a
fan of fantasy sports or American sports, in 2009, he concocted a new betting game for the U.S.
marketdubbed daily fantasy sports (DFS).
36.
Hubdub quickly spun off a new company, FanDuel, to accept bets with real
7
money.
III.
By Rewriting the Rules, DFS Created a New Business Model for Sports Betting
37.
DFS is a new business model for online gambling. The DFS sites themselves
collect wagers (styled as fees), set jackpot amounts, and directly profit from the betting on
their platforms. DFS rules enable near-instant gratification to players, require no time
commitment, and simplify game play, including by eliminating all long-term strategy.
38.
In several fundamental respects, DFS represents a clear departure from season-
long fantasy sports:

a.
First, DFS games run on a daily and weekly basis. Scoring depends on the
performance of particular athletes in a given week, a given weekend, on a
given night, or even a given tournament or race (as with golf, MMA, or
NASCAR). This allows for faster-paced games that require less time
commitment.
b.
Second, DFS games allow no trading; no dropping players; and no

adjusting lineups. Players must lock in or finalize their lineup by a
particular deadline. After the lineup is locked, a DFS player can do
nothing but watch as the performance of athletes in real-world games
determines whether he won.
c.
Third, DFS uses neither of the competitive draft formats, i.e. either the
snake or the auction draft. Instead, it uses a salary cap draft. In a salary
cap draft, the site assigns each athlete a theoretical value (a salary).
Bettors can fill their team with players until they have exhausted their
salary cap or allocation. Thus, the same athlete can appear on multiple
8
teams.
39.
The salaries assigned to athletes constitute odds roughly reflecting how the DFS
operator (e.g., FanDuel) expects a particular athlete to perform over a given time period.
40.
The quick time frame of DFS and the ability to set the lineup only once eliminates
any of the strategic elements associated with managing a traditional fantasy team over the course
of a season. As compared to traditional fantasy sports, DFS rules also eliminate any strategy
associated with drafting good players first, because the same players can appear in every lineup.
41.
As FanDuel exhorted on its website, with DFS: The format simplified. The
winning amplified. And the money? Lets just say your season-long league won't pay out $75
million a week.
42.
Rather than a new type of fantasy league, DFS simply devised another way to bet
on sports.
43.
Casinos and bookmaking operations in Nevada and non-U.S. jurisdictions with
legalized sports gambling have long allowed prop (short for proposition) betsi.e., bets on
statistics and milestones that occur in given games or in connection with particular players.
44.
Indeed, FanDuel recognizes that DFS is akin to sports prop betting. FanDuel
advises on its website: By taking into account over-under lines, as well as money lines and
player props, FanDuel players gives [sic] themselves more opportunities to win.
45.
Similarly, casinos and bookmaking operations in Nevada and, to a more limited
extent, the state lotteries in Delaware, Montana, and Oregon permit parlay sports betting.
46.
In a parlay, a bettor attempts to correctly predict the outcome of several variables
as part of a single wager. A DFS lineup is a parlay bet in which the relevant variables are the
athletes.
47.
As the CEO of one DFS company put it, the large format DFS games are like a
sports betting parlay on steroids.

IV.
FanDuel Enters the Sports Gambling Business

48.
Early on, FanDuel recognized the potential of DFS as a business model for online
betting.
49.
As FanDuel sought to grow its business it told one investor its target market was
male sports fans who cannot gamble online legally. FanDuel observed that its users have a
higher preponderance to gambling; more than half of respondents to a FanDuel customer
survey said they bet or gamble online for real money.
50.
FanDuel offers several game styles to appeal to a variety of tastes.
51.
Of particular note, FanDuel offers Guaranteed Prize Pool or GPP games,
50/50 games, and head-to-head games. Each game is structured differently.

a.
GPP games. The GPP games are the most popular based on numbers of
individual players, most lineups and highest payouts. Some GPPs can
accept up to several hundred-thousand lineups from DFS players, with the
highest-scoring lineups winning major cash prizes. To play, GPPs cost
anywhere from less than a dollar to upwards of $5,000 to submit a single
wager. In one of the largest GPPs, known as the Millionaire Maker,
DFS players wager $25 per lineup for a chance to win a jackpot of up to
$1 million.
b.
50/50 games. 50/50 games allow DFS players to effectively double their
money if a lineup places in the top half of point-scoring lineups.
c.
Head-to-Head games. In head-to-head games, two DFS players enter a
10
lineup against each other, and the lineup with more points wins. Bettors
can wager up to $10,600 in head-to-head games. The bettor with the
winning lineup gets the pot, minus the cut FanDuel takes.
52.
FanDuel takes a cut of all wagers, which, using poker slang, FanDuel executives
at times refer to as its rake. The rake constitutes the companys primary source of revenue
ranging from about 6% to more than 14%.
53.
As part of its marketing, FanDuel allows DFS players to play certain games for
free. Borrowing another term from poker, these free games are called freerolls.
54.
Except for limited exceptions, FanDuel requires players to put money at risk for a
chance to win cash prizes.

55.
FanDuel accepts wagers in connection with a wide range of amateur and
professional sports. The companys offerings include: Major League Baseball, NFL football,
NBA basketball, college football, and college basketball.
V.
How Betting and Scoring on FanDuel Works

56.
A DFS wager constitutes a prediction by a DFS player about the combination of
athletes (i.e., the lineup) that he believes may score the most points in a particular DFS game.
After finalizing his lineup, a DFS player cannot control or influence whether the athletes he
chose will perform at, above, or below expectations.
57.
Given this inherent uncertainty, certain DFS players will enter hundreds, or even
thousands, of unique lineups in the hopes that one or more combinations of athletes will score
well.
58.
The FanDuel rules identify several circumstances where even the athletes on the
field may have no influence over the number of DFS points scored. For example, the points
11
associated with a particular athlete may be reduced or zeroed out due to:
a.
rained out, postponed, suspended, or shortened game;
b.
the league failing to correct official game statistics before DraftKings

declares a winner; or
c.
59.
a trade involving the athlete that occurs after a contest is created.
The scores applied to any DFS lineup directly reflect the real-game performance
of athletes.
60.
Until a tally of the final box scores is available, the winning DFS wager or wagers
are unknown and unknowable.

61.
FanDuels rules for each major sport (professional football, baseball, basketball,
and hockey) specify that FanDuel will wait until all the player statistics have been reported by
our third party stats provider. This lets us ensure that the final box scores are complete.
62.
Similar to other types of sports betting, DFS players will try to predict or
handicap whether the odds offered by the bookmaker (i.e. the salary FanDuel assigns a given
athlete) accurately reflect the expected outcome (i.e. how well that athlete will perform in an
actual game).
63.
Just as the most sophisticated sports handicapper has no control over whether the
team he chose will beat the point spread, a DFS player has no control over whether the lineup he
chose will perform.
64.
As a FanDuel spokesperson aptly observed, the results in DFS are contingent on
the positive performance of all of their players in actual games.

VI.
FanDuel Markets Itself as a Game Anyone Can Win

65.
In a bid for players and market share, FanDuel dramatically increased advertising
12
spending this fall. FanDuel spent a reported $46.9 million on television commercials that aired
almost 9,500 times in the month of September alone.
66.
In commercial-after-commercial, FanDuels advertisements emphasize the ease of
winning massive jackpots, including through purported testimonials from ordinary people stating
how easy it is to win big.
67.
Featuring vignettes of different purported winners, one FanDuel ad provided:
Ive won over $29,000 on FanDuel. Nothing special about me. The difference is, is that I
played, and they didnt. . . Even the novice can come in and spend 1 or 2 dollars and win 10, 20
thousand dollars.
68.
Another FanDuel advertisement urged: Its simple: choose a dollar league or
play for more. . . FanDuel pays out over $75 million a week more than any other site.
13
69.
The ease and simplicity of playing and winning is further reinforced on the
FanDuel website. On its homepage, FanDuel promises:

a.
No season-long commitment.
b.
WIN REAL CASH Paying out expected $2 Billion in real cash prizes
this year. And get instant payouts as soon as contests end.
70.
Elsewhere on its website, FanDuel featured a promotional video for its High
Roller contest in Las Vegas. Billed as the ultimate tournament for high rollers, the
promotional video highlights DFS users being showered with cash or with champagne while
holding a giant check for one million dollars.
14
VII.
FanDuel Operates a Gambling Business

71.
Since 1894, Article I, Section 9 of the New York State Constitution has expressly
prohibited bookmaking and all other forms of sports gambling (apart for an exception for parimutuel betting on horseracing).
72.
The New York Penal Law has long recognized crimes for promoting gambling,
including bookmaking, and for maintaining gambling devices and records. Gambling is defined,
in part, as wagering on a future contingent event not under the bettors control or influence or a
contest of chance.
73.
Recognizing that these laws and similar laws in other jurisdictions are directly
contrary to the DFS model, FanDuels U.S. website maintains that DFS is considered a game of
skill and, therefore, legal.
74.
Yet, in the United Kingdom, where sports gambling is legal, FanDuel has taken
the necessary regulatory steps to operate as a legitimate online sports betting company. In an
October 30, 2015 article in the Herald Scotland, FanDuel said it planned to launch in the U.K.
soon. FanDuels application with the U.K. Gambling Commission to operate gambling
15
software is listed as in progress on the Commissions website. In a related statement, a FanDuel

spokesperson said the application is a part of the regulatory compliance process to offer fantasy
sports in the UK market.
75.
When presenting to investors, FanDuel is even more direct about its relationship
to gambling.
76.
For example, in an investor presentation, FanDuel noted it had hired the online
poker company Full Tilts head of affiliates to help FanDuel acquire new users. Indeed, several
of FanDuels affiliates are gambling oriented, including companies like Vegas Insider and
BetVega, a sports betting and handicapping website and FanDuels ninth largest affiliate.
77.
Elsewhere, FanDuel conceded to investors that when FanDuel surveyed its users
almost twenty-percent of respondents who acknowledged they bet or gamble said their friends
would describe them as a bit of an addict.
78.
The investing community likewise views FanDuel and DFS companies as
gambling. For example, in a presentation prepared for the FSTAs winter conference in 2014 (the
FSTA Presentation), Eilers Research, a gaming industry research firm, compared DFS to the
comparable industries of casinos, lotteries, and sports betting:
16
79.
In an analysis provided to one investor, FanDuel benchmarked its performance to
that of Bwin.Party, one of the largest online gambling companies in the world and whose core
business is sports gambling. Among other comparisons, the spreadsheets dropped the pretense of
referring to the bets on the FanDuel site as fees, comparing FanDuels total stakes by quarter
to the equivalent numbers for Bwin.Partys Sports Betting operation.
80.
As reflected in the FSTA Presentation, DFS has had success converting casual
gamblerslike those who play the lotteryinto DFS players. One slide observed that the largeprize GPPs run by DraftKings, FanDuel, and others were already attracting new users & serving
as a new alternative for some ticket/lottery players.
81.
Yet just as in poker, blackjack, and horseracing, a small percentage of
professional gamblers manage to use research, software, and large bankrolls to extract a
17
disproportionate share of DFS jackpots.

82.
With blackjack, professional players profit at the expense of the casino.
83.
With poker and DFS, professional players, also known as sharks, profit at the
expense of casual players, also known as minnows.

84.
Of the top 10,000 players by cumulative amount wagered, 74% lost money over
2013 and 2014.

85.
On any given day, FanDuel will accept substantially more than five wagers placed
by New York residents. These wagers total significantly more than $5,000.
86.
Based on numbers from FanDuel, over 250,000 individual New York residents
are registered with the company as of September 2015.

VIII. Gambling Addiction Associated with DFS is an Increasingly Serious Problem
87.
Experts in gambling addiction and other compulsive behaviors have identified
DFS as a serious and growing threat to people at-risk for, or already struggling with, gamblingrelated illnesses.
88.
DFS is an especially powerful draw for young males who are increasingly seeking
help for compulsive gambling related to DFS with counselors and appearing at Gamblers
Anonymous meetings.
89.
For those struggling with gambling addiction or vulnerable to it, certain structural
characteristics make DFS particularly dangerous.

90.
As Keith Whyte, the Executive Director of the National Council on Problem
Gambling (NCPG) explains, these structural characteristicswhich are generally absent from
season-long fantasy leaguesinclude:
the ability for players to place large bets; the chance for players to win large
payouts; the high speed of play (or, put another way, the relatively short interval
18
between the placing of a bet and the determination of the outcome of the bet); and
the perception of skill as a determinant in the outcome of the wager.
91.
Dr. Jeffrey L. Derevensky, Director of the International Centre for Youth
Gambling Problems and High-Risk Behavior at McGill University, notes that, among other
things, false or misleading representations of the skill involved in DFS can lead players to a
preoccupation with DFS, chasing of losses, and developing symptoms and behaviors associated
with a gambling disorder.
IX.
FanDuel Attracts Scrutiny as Gambling Business

92.
After incorporating in 2009, FanDuel quietly attracted investments, but remained
relatively unknown outside of the subculture of DFS players and the investor community.
93.
The FSTA Presentation estimated that just 2.5% of participants in traditional
leagues played DFS.

94.
As the president of the FSTA observed earlier this year, as recently as two years
ago everything changed. [DFS] was close to zero, a nascent pastime.

95.
Flush in 2015 with new investment capital, FanDuel began an advertising blitz
designed to expand DFS beyond its niche market and grow market share as quickly as possible.
96.
The growth in DFS advertising has been as spectacular as it was sudden. For all of
2014, FanDuel spent just over $2 million on advertising with NBC Universal/Comcast. In just
the first ten months of 2015, FanDuel spent over $12 million with NBC Universal/Comcast.
97.
Advertising reached a peak in the weeks leading up to the 2015 NFL season,
when it became nearly impossible to watch televised sports without encountering a DFS
commercial.
98.
On October 5, 2015, The New York Times published an expose titled Scandal
Erupts in Unregulated World of Fantasy Sports that introduced DFS for the first time to many
19
non-players. The story focused on DFS fairness and strongly suggested that a DraftKings
employee had improperly used inside information to improve his chances of winning on
FanDuel.
99.
On October 6, 2015, the Office of the New York Attorney General (NYAG)
opened an investigation
100.
Reports soon emerged indicating that various other federal and state enforcement
agencies and regulators were probing the operations of the two companies.
101.
Gaming officials in several states raised questions as to the legality of the DFS
business.
102.
For an increasing number of states, the answer appears to be no.

Washington State
103.
Washington State and New York State laws have identical statutory definitions of
gambling and contest of chance. Relying on those definitions, the Washington State
Gambling Commission has previously declared that online fantasy sports wagering is not
authorized for play in Washington State.
104.
While continuing to offer games in New York, neither DraftKings nor FanDuel
currently accept wagers in Washington State.1 On October 21, 2015, Chris Stearns, Chairman of
the Washington State Gambling Commission, highlighted this inconsistency, observing in a
tweet: NY definition of contest of chance & gambling same as WAs . . .Yet DFS offered in
NY but not WA.
Michigan
105.
On September 1, 2015, the Chairman of the Michigan Gaming Control Board
In addition to Washington and Nevada, DraftKings and FanDuel do not currently accept wagers in Arizona,
Louisiana, Iowa, and Montana because of concerns related to state law.
20
stated that that DFS is illegal under current Michigan law.

Georgia
106.
On September 23, 2015, citing the gambling prohibitions in the Georgia state
constitution and criminal laws, the Georgia Lottery Corporation demanded that the two rival
DFS companies explain how it is that FanDuel and DraftKings are able to lawfully operate
fantasy sports games in the State of Georgia.
Nevada
107.
On October 15, 2015, the Nevada Gaming Control Board issued a public notice
announcing that DFS constituted gambling. The notice stated, among other things, that:
because DFS involves wagering on the collective performance of individuals
participating in sporting events, under current law, regulation and approvals, in order to
lawfully expose DFS for play within the State of Nevada, a person must possess a license
to operate a sports pool issued by the Nevada Gaming Commission.
108.
In a memorandum dated October 16, 2015, the Office of the Nevada Attorney
General issued a formal opinion supporting the decision of the Nevada Gaming Control Board.
The opinion concluded:
In short, daily fantasy sports constitute sports pools and gambling games. They may also
constitute lotteries, depending on the test applied by the Nevada Supreme Court. As a
result, pay-to-play daily fantasy sports cannot be offered in Nevada without licensure.
109.
FanDuel and DraftKings stopped accepting wagers in Nevada a few hours after
the decision of the Nevada Gaming Control Board.

Illinois
110.
On October 16, 2015, a spokesperson for the Illinois Gaming Board expressed the
Boards view that DFS is illegal in Illinois. The Board announced it was seeking a formal
opinion from the Illinois State Attorney General.
21
National Collegiate Athletic Association (NCAA)

111.
And on August 27, 2015, the NCAA sent a cease-and-desist letter to FanDuel
objecting to DFS games involving college sports.

112.
The NCAAs letter provided that DFS is inconsistent with our values, by-laws,
rules and interpretations regarding sports wagering, and may violate the UIGEA, the
Professional and Amateur Sports Protection Act, and state gambling laws.
113.
On September 22, 2015, the NCAA reportedly told college athletic directors that
the NCAA considers DFS to be gambling, and that athletes found to violate a ban on playing
DFS would face a suspension from college sports of no less than one year.
114.
FanDuel continues to run DFS games connected with college sports contrary to
the NCAAs specific demand.
FIRST CAUSE OF ACTION PURSUANT TO

EXECUTIVE LAW 63(12):
NEW YORK STATE CONSTITUION ARTICLE I, SECTION 9
115.
The plaintiff repeats and realleges paragraphs 1 through 114 as if fully set forth
116.
Executive Law 63(12) authorizes the Attorney General to bring an action to
herein.
enjoin repeated illegal acts or persistent illegality in the carrying on, conducting, or transaction of
business.
117.
Article I, Section 9 of the New York State Constitution prohibits any lottery or the
sale of lottery tickets, pool-selling, book-making, or any other kind of gambling, except lotteries
operated by the state, pari-mutuel betting on horse races, and casino gambling at no more than
seven facilities.
22
118.
As set forth above, Defendant violates Article I, Section 9 of the New York State
Constitution by running a book-making or other kind of gambling business.

119.
By its actions in violation of Article I, Section 9 of the New York State
Constitution, defendant has engaged in repeated and persistent illegal conduct in violation of
Executive Law 63(12).
SECOND CAUSE OF ACTION PURSUANT TO
VIOLATION OF NEW YORK PENAL LAW 225.10
120.
121.
herein.
business.
122.
Penal Law 225.10 prohibits any person from promoting gambling in the first
degree by knowingly advancing or profiting from unlawful gambling activity by engaging in

bookmaking to the extent that he receives or accepts in any one day more than five bets totaling
more than five thousand dollars.
123.
As set forth above, defendant violates Penal Law 225.10 by knowingly
advancing and profiting from unlawful gambling activity by receiving and accepting in any one
day, and indeed on many days, more than five bets totaling more than five thousand dollars.
124.
By its actions in violation of Penal Law 225.10, defendant has engaged in
repeated and persistent illegal conduct in violation of Executive Law 63(12).
23
THIRD CAUSE OF ACTION PURSUANT TO

125.
126.
herein.
business.
127.
Penal Law 225.05 prohibits any person from promoting gambling in the second
degree by knowingly advancing or profiting from unlawful gambling activity.

128.
advancing or profiting from unlawful gambling activity.

129.
By its actions in violation of Penal Law 225. 05, defendant has engaged in
FOURTH CAUSE OF ACTION PURSUANT TO

130.
131.
herein.
business.
132.
Penal Law 225.20 prohibits any person from possessing gambling records in the
first degree when, with knowledge of the contents thereof, he possesses any writing, paper,
instrument or article of a kind commonly used in the operation or promotion of a bookmaking
24
scheme or enterprise, and constituting, reflecting or representing more than five bets totaling
133.
As set forth above, defendant violates Penal Law 225.20 by, with knowledge of
the contents thereof, possessing any writing, paper, instrument or article of a kind commonly
used in the operation or promotion of a bookmaking scheme or enterprise and constituting,
reflecting or representing more than five bets totaling more than five thousand dollars.
134.
To wit, Defendant maintains a computer system recording hundreds of thousands
of illegal wagers.
135.
FIFTH CAUSE OF ACTION PURSUANT TO

136.
137.
herein.
business.
138.
second degree when, with knowledge of the contents thereof, he possesses any writing, paper,
scheme or enterprise.
139.
25
used in the operation or promotion of a bookmaking scheme or enterprise.

140.
of illegal wagers.
141.
SIXTH CAUSE OF ACTION PURSUANT TO

REPEATED AND PERSISTENT FRAUDULENT CONDUCT
142.
143.
herein.
enjoin repeated or persistent fraudulent conduct.

144.
As set forth above, defendant has engaged in repeated and persistent fraudulent
acts by conduct, including but not limited to:

a. Misrepresenting that Defendant complies with applicable laws
b. Misrepresenting the likelihood of a casual player will win a jackpot;
c. Misrepresenting the degree of skill implicated in the games; and
d. Misrepresenting that Defendants games are not considered gambling.
145.
By these actions, defendant has engaged in repeated and persistent fraudulent
conduct in violation of Executive Law 63(12).
26
SEVENTH CAUSE OF ACTION PURSUANT TO

BUSINESS CORPORATION LAW 1303
146.
147.
Business Corporation Law (BCL) 1303 authorizes the Attorney General to
herein.
bring an action or special proceeding to enjoin or annul the authority of any foreign corporation
which within this state contrary to law has done or omitted any act which if done by a domestic
corporation would be a cause for its dissolution under section 1101.
148.
BCL 1101(a)(2) provides that where a corporation has exceeded the authority
conferred on it by law or abused its powers contrary to the public policy of the state, it is liable to
be dissolved.
149.
As set forth above, defendant operates an illegal gambling business in violation of
the New York State Constitution, New York Penal Law, and other applicable statutes.
150.
Defendant has also engaged in repeated and persistent fraudulent acts by conduct,
including but not limited to:

a. Misrepresenting that defendant complies with applicable laws
d. Misrepresenting that defendants games are not considered gambling.
151.
As such, defendant has abused its powers contrary to the public policy of the
state, warranting annulment of its authority to do business in this state and an injunction against
its continued operation of an illegal gambling business.
27
EIGHTH CAUSE OF ACTION PURSUANT TO

GENERAL BUSINESS LAW 349
152.
153.
GBL 349 prohibits deceptive acts and practices in the conduct of any business,
herein.
trade, or commerce in the state of New York.

154.
As set forth above, defendant has engaged in deceptive acts and practices in
violation of GBL 349 by conduct, including, but not limited to:

a. Misrepresenting that defendant complies with applicable laws;
b. Misrepresenting that casual player is likely to win a jackpot;
c. Misrepresenting that DFS is a skill game; and
155.
By its actions in violation of GBL 349, defendant has engaged in repeated and
persistent illegal conduct in violation of Executive Law 63(12).
NINTH CAUSE OF ACTION PURSUANT TO

156.
157.
GBL 350 prohibits false advertising in the conduct of any business, trade, or
herein.
commerce in the state of New York.

158.
As set forth above, defendant has engaged in false advertising in violation of GBL
350 by conduct, including, but not limited to:

a. Advertising that defendant complies with applicable laws;
28
INDEX NO. 453054/2015

NYSCEF DOC. NO. 2

NEW YORK COUNTY
------------------------------------------------------------------------X
by ERIC T. SCHNEIDERMAN, Attorney General of the
State of New York;
COMPLAINT
Plaintiff,
Index No. _______
- against -
IAS Part ________

Justice ________
DraftKings, Inc.,
Defendant.
------------------------------------------------------------------------ X
The People of the State of New York, by their attorney, Eric T. Schneiderman, Attorney
General of the State of New York, allege, upon information and belief:
1.
Fantasy sports is a game enjoyed and legally played by millions of people
nationwide, including in New York.

2.
In fantasy sports, players draft teams, set imaginary lineups, and score
points based on the performance of professional and amateur athletes in real games.
3.
DraftKings, Inc. (DraftKings) exploits the good will associated with this game.
Unlike the season-long competition played mostly for bragging rights or side wagers, DraftKings
runs a casino-style gambling operationdubbed daily fantasy sports (DFS)where bettors
can wager up to $10,000 per line-up and enter for a chance to win jackpots of more than
$1 million. In 2014, DFS players in New York State wagered over $25 million on DraftKings,
4.
DraftKings uses advertisements to lure New York residents with promises of easy
riches for a lucky few sports fans. The company has spent $21 million dollars this year alone on
1
ads urging Its the simplest way of winning life-changing piles of cash.
5.
Other commercials promise: The giant check is no myth . . . BECOME A
MILLIONAIRE!
6.
But DraftKings only offers a way to bet on existing sporting events, nothing
more. And its approach is not new: Bookmaking operations in jurisdictions with legal gambling
like Nevada have long accepted sports proposition or prop bets (to bet on game statistics and
milestones) and parlay bets (to simultaneously bet on several, independent variables in a single
wager).
7.
As one DFS CEO colorfully described it, DFS is like a sports betting parlay on
steroids. DraftKings specifically encourages DFS players to consult the Vegas betting odds for
athlete prop bets.
8.
The speed of DraftKings games, the size of their jackpots, and the degree to
which the games are sold as winnable have ensnared compulsive gamblers and threaten to trap
populations at greater risk for gambling addiction, particularly male college students. This has
2
prompted gambling addiction experts and advocates to sound the alarm.

9.
Until a major spike in ad spending this fall and a public scandal over the fairness
of its games, DraftKings managed to avoid serious scrutiny as a gambling business. As an

increasing number of states examine the companys business model, they are reaching the same
realization; in Nevada, Georgia, Illinois, and Michigan, gaming officials have each declared DFS
to be gambling or have otherwise raised serious doubt about its legality.
10.
DraftKings does not offer games in Washington State (which has the same
definition of gambling as New York) and in four other states (Arizona, Iowa, Louisiana, and
Montana). When the Nevada Gaming Control Board recently determined that DFS qualified as
gambling under state law, the company suspended Nevada operations the same day.
11.
On November 10, 2015, the Office of the New York Attorney General (NYAG)
sent a cease and desist letter to DraftKings, advising that DraftKings that its business violated the
law in New York Statewhich accounts for approximately 7% of DraftKings active usersand
must stop accepting wagers from New York State. The letter also served as formal pre-litigation
notice, indicating that NYAG would commence an enforcement action if DraftKings failed to
abide by the law. It refused, choosing to file an improper lawsuit during the notice period.
12.
DraftKings continues to accept wagers from a gambling business in flagrant
disregard of New Yorks state constitution, penal laws and other statutes.
13.
The State therefore brings this action to enjoin DraftKings from continuing to
operate an unlawful gambling business in New York.

JURISDICTION AND PARTIES
14.
Plaintiff People of the State of New York, by Attorney General Eric T.
Schneiderman, brings this action pursuant to Executive Law 63(12), Business Corporation Law
(BCL) 1303, and General Business Law (GBL) 349 and 350.
15.
Defendant DraftKings is a Delaware corporation, with its principal place of
business at 225 Franklin Street, 26th Floor, Boston, Massachusetts 02110.

16.
This Court has jurisdiction pursuant to: (i) Executive Law 63(12), under which
the Attorney General is empowered to seek injunctive relief, restitution, disgorgement and
damages when a person or business entity engages in repeated fraudulent or illegal acts or
persistent fraud or illegality in the carrying on, conducting, or transacting of business; (ii) BCL
1303, which authorizes the Attorney General to bring an action to restrain a foreign corporation
from doing in this state without authority any business for the doing of which it is required to be
authorized in this state; and (iii) General Business Law 349(b), which authorizes the Attorney
General to seek injunctive relief, restitution, disgorgement and civil penalties when a person or
business engages in deceptive business acts and practices.
FACTS
I.
Traditional Fantasy Sports Gained Fans as a Friendly, Season-Long Competition
17.
Fantasy sports emerged in its modern form no later than the 1980s, starting
initially with baseball and football and later expanding to other sports.
18.
In traditional fantasy sports, participants create imaginary or fantasy teams
composed of real amateur and professional athletes. During the course of the regular season,
participants may adjust those fantasy teams and then score points depending on the real-world
performance of the athletes appearing on their fantasy teams.
19.
At the end of the season, all points are tallied and the team with the most points
wins.
4
20.
With the advent of the internet, traditional fantasy sports has exploded in
popularity.
21.
Websites run by ESPN, CBS Sports, and others made, and continue to make it
easy to run a fantasy league and compete against friends or colleagues. These websites host the
leagues, maintain records, tabulate points, and create a forum for interacting with other league
participants.
22.
Each traditional fantasy league typically designates a commissioner, i.e. one of
the participants who handles administrative issues, including registering with an internet host
site.
23.
While the precise format and rules vary from game to game, traditional fantasy
sports competitions share several common elements:

a.
A competitive draft. Prior to the start of sports season, participants draft
a team from athletes expected to play in a particular league (e.g., Major League
Baseball). The draft proceeds as either: (i) a round-robin snake draft, where the
last participant to select an athlete in one round gets the first pick in the next; or
(ii) an auction draftwhere each participant receives a set budget of credits with
which to bid, and each athlete goes to the highest bidder. In the typical version of
the game, each athlete can be drafted by only one team. Thus, each participant has
an incentive not only to pick the best available athletes for his own fantasy team,
but to pick athletes to block another team
b.
Trading, Dropping, Adding Players, and Setting Lineups. To be successful
over the course of a season, participants must actively manage their teams. This
includes negotiating athlete trades with other participants, dropping injured or
underperforming athletes, and adding free agents (athletes not on the roster of any
fantasy team). Such moves and adjustments can seek to add points to a
participants team or to deny them to another.
24.
By making moves over the course of a long season, participants can insulate
themselves to some degree from day-to-day variations in performance, can respond to player
injuries, trades, suspensions, and other unpredictable occurrences, and can otherwise seek to
improve their chances.
25.
To remain competitive in traditional fantasy sports, participants must adjust teams
and lineups throughout a season. No single game or week is determinative of a participants

success or failure.
26.
Depending on the host site, the participants can exert substantial control over how
the fantasy game is administered and scored. Among other changes, participants can often adjust
the scoring formats, the universe of players available for drafting, the size of each team, the free
agency rules, and the lineup requirements
27.
Most participants in traditional fantasy leagues do not participate in competitions
for major prizes or enter wagers through the fantasy league host sites.
28.
Mainstream sites that host traditional fantasy sports like ESPN and CBS Sports
have typically generated the bulk of their revenue from advertising and administrative fees.
29.
To the extent that traditional fantasy leagues involve wagers between participants,
with limited exceptions, mainstream host sites like ESPN and CBS Sports, do not participate or
profit from those bets.
30.
The Fantasy Sport Trade Association (FSTA), a trade association representing
companies like the Defendant, estimated that by 2008, about 30 million people played traditional
fantasy sports. Since then, the numbers of people who play traditional fantasy sports has
continued to climb.
31.
The sweeping majority of participants in traditional fantasy sports compete solely
for bragging rights or side wagers.

II.
An Internet Gambling Prohibition Inspires a New Form of Internet Gambling

32.
In 2006, the U.S. Congress passed the Unlawful Internet Gambling Enforcement
Act (UIGEA) to expand the mechanisms available to federal prosecutors seeking to enforce
anti-gambling laws against internet-based gambling companies. This statute primarily introduced
new consequences for financial institutions that process illegal gambling transactions.
33.
UIGEA explicitly left all other federal and state gambling laws intact, and
provided that: No provision of this subchapter shall be construed as altering, limiting, or

extending any Federal or State law or Tribal-State compact prohibiting, permitting, or regulating
gambling within the United States.
34.
In 2008, an online betting entrepreneur named Nigel Eccles and a few partners
founded the online wagering platform Hubdub. That site let users bet on the outcome of news
events. As a former employee at two online gambling companies in the U.K., Eccles reportedly
saw potential in combining the fun and excitement of online gambling with the mass interest in
news. As Eccles put it, the idea was to gamble on what you believe will happen. You can bet
on any subject under the sun.
35.
Hubdub, however, had a fatal flaw: Because UIGEA made processing wagers
involving real money illegal in the United States, the site operated with virtual currency. This
apparently provided insufficient excitement for bettors, and the news-betting component folded a
few years later.
36.
Reviewing UIGEA, however, Eccles seized on language that excluded certain
fantasy sports and simulations from the definition of bet or wager. Although previously not a
fan of fantasy sports or American sports, in 2009, he concocted a new betting game for the U.S.
marketdubbed daily fantasy sports (DFS).
37.
Hubdub quickly spun off a new company, FanDuel, to accept bets with real
38.
In 2012, DraftKings followed and began to offer DFS too.
money.
III.
By Rewriting the Rules, DFS Created a New Business Model for Sports Betting
39.
DFS is a new business model for online gambling. The DFS sites themselves
collect wagers (styled as fees), set jackpot amounts, and directly profit from the betting on
their platforms. DFS rules enable near-instant gratification to players, require no time
commitment, and simplify game play, including by eliminating all long-term strategy.
40.
In several fundamental respects, DFS represents a clear departure from season-
long fantasy sports:

a.
First, DFS games run on a daily and weekly basis. Scoring depends on the
performance of particular athletes in a given week, a given weekend, on a
given night, or even a given tournament or race (as with golf, MMA, or
NASCAR). This allows for faster-paced games that require less time
commitment.
b.
Second, DFS games allow no trading; no dropping players; and no

adjusting lineups. Players must lock in or finalize their lineup by a
particular deadline. After the lineup is locked, a DFS player can do
nothing but watch as the performance of athletes in real-world games
determines whether he won.

c.
Third, DFS uses neither of the competitive draft formats, i.e. either the
snake or the auction draft. Instead, it uses a salary cap draft. In a salary
cap draft, the site assigns each athlete a theoretical value (a salary).
Bettors can fill their team with players until they have exhausted their
salary cap or allocation. Thus, the same athlete can appear on multiple
teams.
41.
The salaries assigned to athletes constitute odds roughly reflecting how the DFS
operator (e.g., DraftKings) expects a particular athlete to perform over a given time period.
42.
The quick time frame of DFS and the ability to set the lineup only once eliminates
any of the strategic elements associated with managing a traditional fantasy team over the course
of a season. As compared to traditional fantasy sports, DFS rules also eliminate any strategy
associated with drafting good players first, because the same players can appear in every lineup.
43.
Rather than a new type of fantasy league, DFS simply devised another way to bet
on sports.
44.
Casinos and bookmaking operations in Nevada and non-U.S. jurisdictions with
legalized sports gambling have long allowed prop (short for proposition) betsi.e., bets on
statistics and milestones that occur in given games or in connection with particular players.
45.
Indeed, DraftKings recognizes that DFS is akin to sports prop betting. DraftKings
advises on its website: Player props are also an excellent source of information for daily fantasy
owners. Props are Vegass best guess for a players productionbasically their projection for
him in fantasy.
46.
Similarly, casinos and bookmaking operations in Nevada and, to a more limited
extent, the state lotteries in Delaware, Montana, and Oregon permit parlay sports betting.
47.
In a parlay, a bettor attempts to correctly predict the outcome of several variables
as part of a single wager. A DFS lineup is a parlay bet in which the relevant variables are the
athletes.
48.
As the CEO of one DFS company put it, the large format DFS games are like a
sports betting parlay on steroids.

IV.
DraftKings Enters the Sports Gambling Business

49.
Early on, Jason Robins, the CEO and co-founder of DraftKings, recognized the
potential of DFS as a business model for online betting.

50.
Shortly after founding DraftKings, Robins reportedly started a thread in the online
forum reddit.com in which he explained: This concept where you can basically bet your team
will win is new and different from traditional leagues that last an entire season. (emphasis
added).
51.
Elsewhere on the thread, Robins emphasized: The concept is different from
traditional fantasy leagues. Our concept is a mash[-]up between poker and fantasy sports.
Basically, you pick a team, deposit your wager, and if your team wins, you get the pot.
(emphasis added).
52.
This is reflected in DraftKings marketing, with DFS promising rapid-fire
contests of:
much shorter duration than the traditional season-long leagues and require no
team management after the draft. Salary cap draft format takes just minutes to
complete, unlike the hours-long snake drafts in traditional leagues. We offer new
contests every day of the season, and our winners are crowned nightly. Payouts
happen immediately after the games no more waiting until the end of the season
to collect winnings!
53.
DraftKings offers several game styles to appeal to a variety of tastes.

10
54.
Of particular note, DraftKings offers Guaranteed Prize Pool or GPP games,
50/50 games, and head-to-head games. Each game is structured differently.

a.
GPP games. The GPP games are the most popular based on numbers of
individual players, most lineups and highest payouts. Some GPPs can
accept up to several hundred-thousand lineups from DFS players, with the
highest-scoring lineups winning major cash prizes. To play, GPPs cost
anywhere from less than a dollar to upwards of $5,000 to submit a single
wager. In one of the largest GPPs, known as the Millionaire Maker,
DFS players wager $20 per lineup for a chance to win a jackpot upwards
of $1 million.
b.
50/50 games. 50/50 games allow DFS players to effectively double their
money if a lineup places in the top half of point-scoring lineups.
c.
Head-to-Head games. In head-to-head games, two DFS players enter a

lineup against each other, and the lineup with more points wins. Bettors
can wager up to $10,600 in head-to-head games. The bettor with the
winning lineup gets the pot, minus the cut DraftKings takes.
55.
DraftKings takes a cut of all wagers, which, using poker slang, DraftKings
executives at times refer to as its rake. The rake constitutes the companys primary source of
revenueranging from about 6% to more than 14%.
56.
Alternatively, Robins agreed in an interview earlier this year that, although he
preferred the term commission, DraftKings cut constitutes a vig, betting slang for the
charge taken by a sports bookie.
57.
As part of its marketing, DraftKings allows DFS players to play certain games for
11
free. Borrowing another term from poker, these free games are called freerolls.
58.
Freeroll games do not typically offer cash prizes, but may award the winner a spot
in a cash prize game.

59.
Except for limited exceptions, DraftKings requires players to put money at risk
for a chance to win cash prizes.

60.
DraftKings accepts wagers in connection with a wide range of amateur and
professional sports. The companys offerings include: Major League Baseball, NFL football,
NBA basketball, college football, college basketball, PGA golf, Major League Soccer,
NASCAR, and Mixed Martial Arts.
V.
How Betting and Scoring on DraftKings Works

61.
A DFS wager constitutes a prediction by a DFS player about the combination of
athletes (i.e., the lineup) that he believes may score the most points in a particular DFS game.
After finalizing his lineup, a DFS player cannot control or influence whether the athletes he
chose will perform at, above, or below expectations.
62.
Given this inherent uncertainty, certain DFS players will enter hundreds, or even
thousands, of unique lineups in the hopes that one or more combinations of athletes will score
well.
63.
The DraftKings rules identify several circumstances where even the athletes on
the field may have no influence over the number of DFS points scored. For example, the points
associated with a particular athlete may be reduced or zeroed out due to:
a.
rained out, postponed, suspended, or shortened game;
b.
the league failing to correct official game statistics before DraftKings

declares a winner; or
12
c.
64.
a trade involving the athlete that occurs too close to when lineups lock.
The scores applied to any DFS lineup directly reflect the real-game performance
of athletes.
65.
Until a tally of the final box scores is available, the winning DFS wager or wagers
are unknown and unknowable.

66.
DraftKings rules for each major sport (professional football, baseball, basketball,
and hockey) specify that: DraftKings will wait until all of the final box scores have been
reported for each contests games to ensure that the final results are accurate.
67.
Similar to other types of sports betting, DFS players will try to predict or
handicap whether the odds offered by the bookmaker (i.e. the salary DraftKings assigns a
given athlete) accurately reflect the expected outcome (i.e. how well that athlete will perform in
an actual game).
68.
Just as the most sophisticated sports handicapper has no control over whether the
team he chose will beat the point spread, a DFS player has no control over whether the lineup he
chose will perform.
69.
As a FanDuel spokesperson aptly observed, the results in DFS are contingent on
the positive performance of all of their players in actual games.

70.
In a November 13, 2015 court filing, DraftKings similarly observed that the
success of DFS lineups depends on the combined performance of real-world athletes.

VI.
DraftKings Markets Itself as a Game Anyone Can Win

71.
In a bid for players and market share, DraftKings dramatically increased
advertising spending this fall. DraftKings alone spent a reported $81 million on television
commercials that aired more than 22,000 times in the lead-up to the NFL season, August 1, 2015
13
through September 14, 2015.

72.
In commercial-after-commercial, DraftKings advertisements emphasized the
ease of winning massive jackpots.

73.
One Draftkings ad promised: taking home your share is simple: just pick your
sport, pick your players, and pick up your cash. Thats it. Its the simplest way of winning lifechanging piles of cash.
74.
Another DraftKings television commercial explained: They make winning easier
than milking a two-legged goat . . . Do you want to be a fantasy football hero? Do you want it to
be easy and fun with a shot to win millions?
14
75.
The giant check is no myth urged another DraftKings ad . . . BECOME A
MILLIONAIRE!
76.
The ease and simplicity of playing and winning is further reinforced on the
DraftKings website. Among the 5 GREAT REASONS to play DFS on DraftKings:

a.
No commitment get your sweat on in the industrys highest paying

guaranteed tournaments. (emphasis added)
b.
Build your team in only minutes and watch your scores update live
online. (emphasis added)
15
VII.
DraftKings Operates a Gambling Business

77.
Since 1894, Article I, Section 9 of the New York State Constitution has expressly
prohibited bookmaking and all other forms of sports gambling (apart for an exception for parimutuel betting on horseracing).
78.
The New York Penal Law has long recognized crimes for promoting gambling,
including bookmaking, and for maintaining gambling devices and records. Gambling is defined,
in part, as wagering on a future contingent event not under the bettors control or influence or a
contest of chance.
79.
Recognizing that these laws and similar laws in other jurisdictions are directly
contrary to the DFS model, DraftKings U.S. website maintains that DFS is a skill game and is
not considered gambling.
80.
Yet, in the United Kingdom, where sports gambling is legal, DraftKings has taken
the necessary regulatory steps to operate as a legitimate online sports betting company. In an
August 17, 2015 press release, DraftKings announced it had received a license to operate in the
U.K.. The release neglected to mention the name of the entity that issued the license (the U.K.
Gambling Commission) or the business categories in which the license entitled DraftKings to
compete (gambling software and pool-betting).
81.
The DraftKings CEO was more straightforward in his 2012 reddit thread,
explaining that DraftKings operates in the gambling space.

82.
When presenting to investors, DraftKings is even more direct about its
relationship to gambling.
83.
For example, in an investor presentation, DraftKings used slides on casinos,
online poker, and sports betting to showcase DraftKings Market Opportunity:
16
a.
Slide 10: Global opportunity for online betting and casino market
estimated at ~$27B now, ~$36B by 2018, which charts the revenue
growth in the Global online poker market and in the Global online
betting and casino markets; and,
b.
Slide 11: Sports Wagering Vertical is a large addressable market, which

highlights the billions of dollars in revenue from legal and illegal sports
betting in the United States.
84.
The investing community likewise views DraftKings and DFS companies as
gambling. For example, in a presentation prepared for the FSTAs winter conference in 2014 (the
FSTA Presentation), Eilers Research, a gaming industry research firm, compared DFS to the
comparable industries of casinos, lotteries, and sports betting:
17
85.
DraftKings business model is directly modeled on other gambling ventures. In his
2012 reddit thread, Robins described DFS as a mash[-]up between poker and fantasy sports.
DraftKings, Robins explained, makes its money in a way that is almost identical to a casino.
86.
Converting gamblers to DFS and associating DraftKings brand with gambling
ventures is central to its growth strategy.

87.
DraftKings signed sponsorship deals with well-known gambling events and
venues, including the World Series of Poker, the World Poker Tour, andin a deal with the New
York Racing Associationthe Belmont Stakes, the third and final leg of the Triple Crown.
88.
One DraftKings executiveJon Aguiar, who is himself a former professional
poker playercredits poker players with a good part of DraftKings rise, explaining to
LegalSportsReport.Com that they pick up DFS quickly: Once they get to DraftKings, they
already know how to deposit, they understand how a bonus works, they can navigate the lobby
[i.e., the wagering system] with ease.
89.
DraftKings embedded keywords related to gambling in the code on its website.
This led search engines like Google to suggest DraftKings to users looking for gambling. For
example, DraftKings used keywords like fantasy golf betting, weekly fantasy basketball
betting, weekly fantasy hockey betting, weekly fantasy football betting, weekly fantasy
college football betting, weekly fantasy college basketball betting, Fantasy College Football
Betting, daily fantasy basketball betting, and Fantasy College Basketball Betting.
90.
As reflected in the FSTA Presentation, DFS has had success converting casual
gamblerslike those who play the lotteryinto DFS players. One slide observed that the largeprize GPPs run by DraftKings, FanDuel, and others were already attracting new users & serving
as a new alternative for some ticket/lottery players.
18
91.
Yet just as in poker, blackjack, and horseracing, a small percentage of
professional gamblers manage to use research, software, and large bankrolls to extract a
disproportionate share of DFS jackpots.
92.
With blackjack, professional players profit at the expense of the casino.
93.
With poker and DFS, professional players, also known as sharks, profit at the
expense of casual players, also known as minnows.

94.
DraftKings data show that 89.3% of DFS players had an overall negative return
on investment for 2013 and 2014.

95.
On any given day, DraftKings will accept substantially more than five wagers
placed by New York residents. These wagers total significantly more than $5,000.
96.
Based on numbers from DraftKings, over 150,000 individual New York residents
placed bets with the company between April 25, 2012 and October 25, 2015.
VIII. Gambling Addiction Associated with DFS is an Increasingly Serious Problem
97.
Experts in gambling addiction and other compulsive behaviors have identified
DFS as a serious and growing threat to people at-risk for, or already struggling with, gamblingrelated illnesses.
98.
DFS is an especially powerful draw for young males who are increasingly seeking
help for compulsive gambling related to DFS with counselors and appearing at Gamblers
Anonymous meetings.
99.
For those struggling with gambling addiction or vulnerable to it, certain structural
characteristics make DFS particularly dangerous.

100.
As Keith Whyte, the Executive Director of the National Council on Problem
Gambling (NCPG) explains, these structural characteristicswhich are generally absent from
19
season-long fantasy leaguesinclude:

the ability for players to place large bets; the chance for players to win large
payouts; the high speed of play (or, put another way, the relatively short interval
between the placing of a bet and the determination of the outcome of the bet); and
the perception of skill as a determinant in the outcome of the wager.
101.
Dr. Jeffrey L. Derevensky, Director of the International Centre for Youth
Gambling Problems and High-Risk Behavior at McGill University, notes that, among other
things, false or misleading representations of the skill involved in DFS can lead players to a
preoccupation with DFS, chasing of losses, and developing symptoms and behaviors associated
with a gambling disorder.
102.
According to documents shared with a potential DraftKings investor, numerous
DFS players struggling with gambling addiction have called customer service to cancel their
accounts and to plead with DraftKings to permanently block them from playing.
DraftKings records show customer inquiries from DFS players seeking assistance with subjects
like Gambling Addict do not reopen, Please cancel account. I have a gambling problem, and
Gambling Addiction needing disabled account.
IX.
DraftKings Attracts Scrutiny as Gambling Business

103.
After incorporating in 2012, DraftKings quietly attracted investments, but
remained relatively unknown outside of the subculture of DFS players and interested investors.
104.
The FSTA Presentation estimated that just 2.5% of participants in traditional
leagues played DFS.

105.
As the president of the FSTA observed earlier this year, as recently as two years
ago everything changed. [DFS] was close to zero, a nascent pastime.

106.
Flush with new investment capital, in 2015, DraftKings began an advertising blitz
designed to expand DFS beyond its niche market and grow market share as quickly as possible.
20
107.
The growth in DFS advertising has been as spectacular as it was sudden. For all of
2014, for example, DraftKings spent just over $1 million on advertising with NBC. In just the
first ten months of 2015, DraftKings spent about $21 million with NBC Universal/Comcast.
108.
Advertising reached a peak in the weeks leading up to the 2015 NFL season,
when it became nearly impossible to watch televised sports without encountering a DFS
commercial.
109.
On October 5, 2015, The New York Times published an expose titled Scandal
Erupts in Unregulated World of Fantasy Sports that introduced DFS for the first time to many
non-players. The story focused on DFS fairness and strongly suggested that a DraftKings
employee had improperly used inside information to improve his chances of winning on
FanDuel.
110.
On October 6, 2015, the Office of the New York Attorney General (NYAG)
opened an investigation
111.
Reports soon emerged indicating that various other federal and state enforcement
agencies and regulators were probing the operations of the two companies.
112.
Gaming officials in several states raised questions as to the legality of the DFS
business.
113.
For an increasing number of states, the answer appears to be no.

Washington State
114.
Washington State and New York State laws have identical statutory definitions of
gambling and contest of chance. Relying on those definitions, the Washington State
Gambling Commission has previously declared that online fantasy sports wagering is not
authorized for play in Washington State.
21
115.
While continuing to offer games in New York, neither DraftKings nor FanDuel
currently accept wagers in Washington State.1 On October 21, 2015, Chris Stearns, Chairman of
the Washington State Gambling Commission, highlighted this inconsistency, observing in a
tweet: NY definition of contest of chance & gambling same as WAs . . .Yet DFS offered in
NY but not WA.
Michigan
116.
On September 1, 2015, the Chairman of the Michigan Gaming Control Board
stated that that DFS is illegal under current Michigan law.

Georgia
117.
On September 23, 2015, citing the gambling prohibitions in the Georgia state
constitution and criminal laws, the Georgia Lottery Corporation demanded that the two rival
DFS companies explain how it is that FanDuel and DraftKings are able to lawfully operate
fantasy sports games in the State of Georgia.
Nevada
118.
On October 15, 2015, the Nevada Gaming Control Board issued a public notice
announcing that DFS constituted gambling. The notice stated, among other things, that:
because DFS involves wagering on the collective performance of individuals
participating in sporting events, under current law, regulation and approvals, in
order to lawfully expose DFS for play within the State of Nevada, a person must
possess a license to operate a sports pool issued by the Nevada Gaming
Commission.
119.
In a memorandum dated October 16, 2015, the Office of the Nevada Attorney
General issued a formal opinion supporting the decision of the Nevada Gaming Control Board.
The opinion concluded:
1
In addition to Washington and Nevada, DraftKings and FanDuel do not currently accept wagers in Arizona,
Louisiana, Iowa, and Montana because of concerns related to state law.
22
In short, daily fantasy sports constitute sports pools and gambling games. They
may also constitute lotteries, depending on the test applied by the Nevada
Supreme Court. As a result, pay-to-play daily fantasy sports cannot be offered in
Nevada without licensure.
120.
FanDuel and DraftKings stopped accepting wagers in Nevada a few hours after
the decision of the Nevada Gaming Control Board.

Illinois
121.
On October 16, 2015, a spokesperson for the Illinois Gaming Board expressed the
Boards view that DFS is illegal in Illinois. The Board announced it was seeking a formal
opinion from the Illinois State Attorney General.
National Collegiate Athletic Association (NCAA)
122.
And on August 27, 2015, the NCAA sent a cease-and-desist letter to DraftKings
objecting to DFS games involving college sports.

123.
The NCAAs letter provided that DFS is inconsistent with our values, by-laws,
rules and interpretations regarding sports wagering, and may violate the UIGEA, the
Professional and Amateur Sports Protection Act, and state gambling laws.
124.
On September 22, 2015, the NCAA reportedly told college athletic directors that
the NCAA considers DFS to be gambling, and that athletes found to violate a ban on playing
DFS would face a suspension from college sports of no less than one year.
125.
DraftKings continues to run DFS games connected with college sports contrary to
the NCAAs specific demand.
FIRST CAUSE OF ACTION PURSUANT TO

NEW YORK STATE CONSTITUION ARTICLE I, SECTION 9
126.
23
herein.
127.
business.
128.
Article I, Section 9 of the New York State Constitution prohibits any lottery or the
sale of lottery tickets, pool-selling, book-making, or any other kind of gambling, except lotteries
operated by the state, pari-mutuel betting on horse races, and casino gambling at no more than
seven facilities.
129.
As set forth above, Defendant violates Article I, Section 9 of the New York State
Constitution by running a book-making or other kind of gambling business.

130.
By its actions in violation of Article I, Section 9 of the New York State
Constitution, defendant has engaged in repeated and persistent illegal conduct in violation of
Executive Law 63(12).
SECOND CAUSE OF ACTION PURSUANT TO

131.
132.
herein.
business.
133.
Penal Law 225.10 prohibits any person from promoting gambling in the first
degree by knowingly advancing or profiting from unlawful gambling activity by engaging in
24
bookmaking to the extent that he receives or accepts in any one day more than five bets totaling
134.
advancing and profiting from unlawful gambling activity by receiving and accepting in any one
day, and indeed on many days, more than five bets totaling more than five thousand dollars.
135.
THIRD CAUSE OF ACTION PURSUANT TO

136.
137.
herein.
business.
138.
Penal Law 225.05 prohibits any person from promoting gambling in the second
degree by knowingly advancing or profiting from unlawful gambling activity.

139.
advancing or profiting from unlawful gambling activity.

140.
By its actions in violation of Penal Law 225. 05, defendant has engaged in
FOURTH CAUSE OF ACTION PURSUANT TO

25
141.
142.
herein.
business.
143.
first degree when, with knowledge of the contents thereof, he possesses any writing, paper,
scheme or enterprise, and constituting, reflecting or representing more than five bets totaling
144.
used in the operation or promotion of a bookmaking scheme or enterprise and constituting,
reflecting or representing more than five bets totaling more than five thousand dollars.
145.
of illegal wagers.
146.
FIFTH CAUSE OF ACTION PURSUANT TO

147.
148.
herein.
26
business.
149.
second degree when, with knowledge of the contents thereof, he possesses any writing, paper,
scheme or enterprise.
150.
used in the operation or promotion of a bookmaking scheme or enterprise.
151.
of illegal wagers.
152.
SIXTH CAUSE OF ACTION PURSUANT TO

REPEATED AND PERSISTENT FRAUDULENT CONDUCT
153.
154.
herein.
enjoin repeated or persistent fraudulent conduct.

155.
As set forth above, defendant has engaged in repeated and persistent fraudulent
acts by conduct, including but not limited to:

27

156.
By these actions, defendant has engaged in repeated and persistent fraudulent
conduct in violation of Executive Law 63(12).
SEVENTH CAUSE OF ACTION PURSUANT TO

VIOLATION OF BUSINESS CORPORATION LAW 1303
157.
158.
BCL 1303 authorizes the Attorney General to bring an action or special
herein.
proceeding to enjoin or annul the authority of any foreign corporation which within this state
contrary to law has done or omitted any act which if done by a domestic corporation would be a
cause for its dissolution under section 1101.
159.
BCL 1101(a)(2) provides that where a corporation has exceeded the authority
conferred on it by law or abused its powers contrary to the public policy of the state, it is liable to
be dissolved.
160.
As set forth above, defendant operates an illegal gambling business in violation of
the New York State Constitution, New York Penal Law, and other applicable statutes.
161.
Defendant has also engaged in repeated and persistent fraudulent acts by conduct,
including but not limited to:

28

162.
As such, defendant has abused its powers contrary to the public policy of the
state, warranting annulment of its authority to do business in this state and an injunction against
its continued operation of an illegal gambling business.
EIGHTH CAUSE OF ACTION PURSUANT TO
163.
164.
GBL 349 prohibits deceptive acts and practices in the conduct of any business,
herein.
trade, or commerce in the state of New York.

165.
As set forth above, defendant has engaged in deceptive acts and practices in
violation of GBL 349 by conduct, including, but not limited to:

a. Misrepresenting that defendant complies with applicable laws;
b. Misrepresenting that casual player is likely to win a jackpot;
c. Misrepresenting that DFS is a skill game; and
166.
By its actions in violation of GBL 349, defendant has engaged in repeated and
persistent illegal conduct in violation of Executive Law 63(12).
NINTH CAUSE OF ACTION PURSUANT TO

167.
168.
GBL 350 prohibits false advertising in the conduct of any business, trade, or
herein.
29
INDEX NO. 453056/2015
FILED: NEW YORK COUNTY CLERK 11/17/2015 01:00 PM

NYSCEF DOC. NO. 43
AFFIDAVIT OF VANESSA IP PERTAINING TO FANDUEL INC.

State of New York
)
)
County of New York )
ss.:
I, VANESSA IP, hereby declare as follows:

1.
I am an investigator in the Internet Bureau of the Office of the New York
Attorney General (NYAG). My work address is 120 Broadway, New York, NY

10271.
2.
I have been assigned to the NYAGs investigation of FanDuel Inc. (FanDuel). I
have attached as exhibits hereto website screenshots, videos, and other documents
associated with the company.
FanDuel Television Commercials
3.
On November 4, 2015, I visited the iSpot.tv website from a computer located in
my office. According to the websites About page at http://www.ispot.tv/aboutus, We

[iSpot.tv] are the go-to platform for Brands, Agencies, Networks, Actors and Developers
to track in real-time paid TV media and related earned digital activity across social,
search & video Our proprietary technology tracks TV Commercials, Movie Trailers
and Show Promotions across the top networks in real-time. I navigated to the webpage
for FanDuel TV Commercials at http://www.ispot.tv/brands/ILc/fanduel. The webpage
listed a selection of videos for FanDuel commercials that had aired on television, along
with information regarding the frequency and recent times and locations of those airings.
4.
I viewed the FanDuel commercial entitled Beat Your Buddies at
http://www.ispot.tv/ad/AkWz/fanduel-one-week-leagues-beat-your-buddies. The
commercial featured interviews from several actual FanDuel players:
Vernon B: Ive won over $29,000 on FanDuel. Nothing special about me.
The difference is, is that I played, and they didnt.
Bradley C: Every single week I can win money on FanDuel.
Arman K: Even the novice can come in and spend 1 or 2 dollars and win
10, 20 thousand dollars.
Chris P: Little bit of time, and a little bit of knowledge If you think it
cant be you, it can be you.
Below are true and correct screenshots of four frames from the Beat Your Buddies
commercial; the full video downloaded from the iSpot.tv web page on November 4,
2015 is attached as Exhibit A.
5.
Another FanDuel commercial, entitled Scott, was located at
http://www.ispot.tv/ad/AAQX/fanduel-one-week-fantasy-football-leagues-scott.
The
video highlighted the experience of FanDuel winner Scott Hanson (Hanson). Hansons
wife describes, Hes a personal trainer, and he turned $35 into over $2 million on
FanDuel You dont have to make a huge investment to get started... and it turned out to
be great. Hanson himself continues, I lost a little bit, and then my third week of
playing, won $15,000. Below are true and correct screenshots of three frames from the
Scott commercial; the full video downloaded from the iSpot.tv web page on November
4, 2015 is attached as Exhibit B.
6.
I viewed the FanDuel commercial entitled Like Christmas at
http://www.ispot.tv/ad/AA8P/fanduel-one-week-fantasy-football-leagues-like-christmas.
One actor in the commercial declared, Its really easy to use! as the voiceover audio
continued, Choose a one-week league, pick your team, and get your cash winnings after
Monday night Over 1.2 million people have already won money on FanDuel. It can
really pay to be a fan! Below are true and correct screenshots of two frames from the
Like Christmas commercial; the full video downloaded from the iSpot.tv web page on
November 4, 2015 is attached as Exhibit C.
7.
I viewed the FanDuel commercial entitled Get off the Sidelines at
http://www.ispot.tv/ad/798H/fanduel-com-get-off-the-sidelines. The announcer

declared, 1.1 million fans like you have won money on FanDuel. Its simple: choose a
dollar league or play for more FanDuel pays out over $75 million a week more than
any other site. Below are true and correct screenshots of three frames from the Get off
the Sidelines commercial; the full video downloaded from the iSpot.tv web page on
November 4, 2015 is attached as Exhibit D.
FanDuels WFBC $250,000 High Roller Contest

8.
On November 5, 2015, I visited the webpage for FanDuels World Fantasy
Baseball Championships (WFBC) $250,000 High Roller contest at

https://www.fanduel.com/high-roller. The contest was promoted as The ultimate
tournament for our high rollers! with an entry fee of $12,500.00, which included a flight
to Las Vegas, limousine ride, three nights in the Cosmopolitan hotel, entry for two into
[FanDuels] High Roller viewing party, and entry for two to [FanDuels] Friday night
King of the Diamond party hosted in a private suite at the Cosmopolitan. Below are
excerpted screenshots of the contest page; a true and correct copy of the webpage is
attached as Exhibit E.
9.
A promotional video was featured on the page. Below are true and correct
screenshots of three frames from FanDuels High Roller video; the full video
downloaded from the FanDuel website is attached as Exhibit F.
10
11
FanDuel Account Sign-up

10.
On November 3, 2015, I visited the FanDuel website at www.fanduel.com. The
homepage touted: ONE-DAY FANTASY SPORTS. REAL MONEY and advertised an

expected $2 Billion in real cash prizes this year. According to the website, FanDuel
offers [m]ore than 20,000+ leagues to choose from every day including contests for
football (National Football League and NCAA college football), baseball (Major League
Baseball), basketball (National Basketball Association and NCAA college basketball),
and hockey (National Hockey League). Below are excerpted screenshots of the FanDuel
homepage; a true and correct copy of the webpage is attached as Exhibit G.
12
11.
I clicked on the button to JOIN NOW, and a window launched to Create your
Account. After providing a full name, email address, username, and password, I clicked
the button to Play Now.
12.
I was directed to a page to add funds to my FanDuel account. The top of the page
urged, Get your free deposit bonus and start winning real cash today. Below, a
message to Claim your bonus before time runs out! was accompanied by a countdown
clock set for 10 minutes. Below is an excerpted screenshot of the FanDuel Add Funds
page; a true and correct copy of the webpage is attached as Exhibit H.
13
13.
I opted to deposit $10.00 with FREE $3 30% deposit bonus and was prompted
to provide credit card payment information: cardholder name, card number, expiration
date, CVV, state/province, and zip code. After entering the information, I clicked on the
Deposit funds button to proceed.
14.
The next screen confirmed my deposit with an onscreen message: Success! Your
payment was processed successfully. As this is your first deposit you got a free bonus
from us. New balance: $10.00 / New pending bonus balance: $3.00. Below is an
excerpted screenshot of the deposit confirmation page; a true and correct copy of the
webpage is attached as Exhibit I.
14
15.
I clicked Continue and was directed to the FanDuel Lobby page at
https://www.fanduel.com/games, from which I could view all contests open on the

FanDuel website, separated by sport.
16.
The top featured contest in the Lobby was the $3M NFL Sunday Million ($500K
to 1st), offering $3,000,000.00 in prizes and a top prize of $500,000.00; the entry fee for
this contest was $25.00. Another featured contest, the $1.25 Million Sun NFL Rush
($100K to 1st) offered access to $1,250,000.00 in prizes for a $5.00 entry fee. Below is
an excerpted screenshot of the FanDuel Lobby page; a true and correct copy of the
webpage is attached as Exhibit J.
15
FanDuel Play and Scoring

17.
I navigated to FanDuels How it works page at https://www.fanduel.com/how-
it-works. At the top of the page was a one minute and 20 second video entitled, How it
works, explaining how to enter daily fantasy sports contests on FanDuel. At one point,
the narrator asserted,How much can you win? Up to you. Just depends on the entry fee
and league you choose get your share of the millions FanDuel pays out each week.
Below are true and correct screenshots of two frames from the How it works video; the
full video downloaded from the FanDuel website on November 3, 2015 is attached as
Exhibit K.
16
18.
I navigated to the Rules & Scoring page at https://www.fanduel.com/rules.
Under the Scoring section were links for each of the sport contests offered by FanDuel:
17
Football, Baseball, Basketball, College Football, College Basketball, and Hockey.

19.
Clicking on any individual sport expanded the section to display the contest
scoring structure for games of that sport. The Football section listed a series of offense
or defense events that could occur over the course of a football game, and the contest
points associated with each of those real-life events. For example, a kickoff return
touchdown by a player on a contest entrants roster would award 6 points; a passing
touchdown would count for 4 points. Entrants were awarded 0.1 points for each rushing
yard made by a player on his or her roster. Other events, such as Interceptions or
Fumbles Lost resulted in contest point penalties. Different contest point values were
associated with the number of game points allowed by a team defense, e.g., 10 points for
0 points allowed, 7 points for 1-6 points allowed, and 1 point for 14-20 points
allowed. For games in which a roster-selected defense allowed more than 28 points, 1
to 4 points would be deducted from a contest score. Below is an excerpted screenshot of
the Rules & Scoring page with Football section expanded:
18
20.
Under the Basketball section of the Scoring portion was listed a similar point-
system structure awarding points based on player events that could occur over the course
of a basketball game, e.g., 2 contest points for each 2-point field goal in a game by a
player on an entrants roster, 3 contest points for each 3-point field goal, 1.2 points for
each rebound, 2 points for each steal or block, and -1 point for each turnover. Below is
an excerpted screenshot of the Rules & Scoring page with Basketball section
expanded; a true and correct copy of the webpage with both Basketball and Football
sections expanded is attached as Exhibit L.
19
21.
On the same page, under the Rules section, was detailed information regarding
the FanDuel guidelines in situations of Postponed Games, Suspended Games,

Traded Players, Contest Settlement and Payment, and Scoring Revisions. For
example, on the subject of Postponed Games:
For NFL contests, you will receive points for any postponed games that are
played no later than Wednesday of that week. For one day MLB contests, if the
postponed game is played on the same day then you will receive points for your
players in those games as normal. If a game is postponed to a later date or called
off for any reason, any players you have selected for that game will receive zero
points.
22.
For Suspended Games:

Rules for how suspended games are treated vary depending on the sport and
game type. A game is considered suspended if it is unfinished, but to be completed
in the future. At a minimum, the statistics compiled prior to the end of the contest
period will count towards contests.
23.
Under the section regarding Traded Players, FanDuel acknowledges that
[p]layers being traded may impact contests that have already been created with the
20
players on their old teams. For example, in some instances a player you selected may
no longer be available in a contest which includes their old team, but not their new team.
In that case, you'll need to select a replacement or be credited with zero points for the
player.
24.
Regarding Contest Settlement and Payment and Scoring Revisions:

Most contests are settled shortly after the last game finishes. However, to settle
we have to wait until all the player statistics have been reported by our third
party stats provider. This lets us ensure that the final box scores are complete.
During the game we receive live scoring from our stats provider, Stats Inc. In
the event [the leagues and stats provider revise the box scores after the final box
score has been released,] the player scores on FanDuel will not be updated and
the settlements will not be revised.
A true and correct copy of the webpage with the five rule sections expanded is attached
as Exhibit M.
25.
I returned to the FanDuel Lobby page at https://www.fanduel.com/games. The
types of contests offered were divided among four groups:
Tournaments -- High-paying contests with guaranteed prize pools;
Leagues -- Compete against 2+ opponents; multiple payout structures;
Head to Heads -- Compete against a single opponent, winner take all; and
50/50s & Multipliers -- Have a 50/50 shot to win - or play for up to 5 times your
money.
A true and correct copy of the webpage section is attached as Exhibit N.

26.
FanDuel entry fees for NFL-based contests ranged from $1.00 to $10,600.00 (for
21
2-player head-to-head contests awarding $20,000.00 to the winner.) Cash prize winnings
ranged from $2.00 to $1,000,000.00. Below are excerpted screenshots of the FanDuel
Lobby and contest detail pages; true and correct copies of the windows are attached as
Exhibit O.
22
27.
At the bottom of the Lobby page, I clicked on the link to FanDuel Support
and was directed to the FanDuel Support Center at https://fanduel.zendesk.com/hc/enus. From that page, I clicked on the link to view all information in the Basics section,
and was directed to https://fanduel.zendesk.com/hc/en-us/sections/202059917-Basics a
webpage with links to seven questions regarding the use of the FanDuel website.
28.
The page for What is FanDuel? at https://fanduel.zendesk.com/hc/en-
us/articles/210202778-What-is-FanDuel- provided a summary of the process for entering

a contest on FanDuel, i.e., Pick a contest Draft your team sit back and watch the
real time stats rolls in. The team that scores the most fantasy points is the winner.
Below is an excerpted screenshot of the What is FanDuel? page; a true and correct
copy of the webpage is attached as Exhibit P.
23
29.
Another question was: Is FanDuel legal? The answer, which appeared on the
webpage https://fanduel.zendesk.com/hc/en-us/articles/210202858-Is-FanDuel-legalnoted, Yes, FanDuels contests are legal under Federal and most states laws. The
laws relating to fantasy sports vary by state; however, in the vast majority of states
fantasy sports is considered a game of skill and, therefore, legal. In most states, a game of
skill is classified as a game where skill is the predominant factor in determining the
winner. Below is an excerpted screenshot of the Is FanDuel legal? page; a true and
correct copy of the webpage is attached as Exhibit Q.
24
30.
FanDuel contests involving NFL games require contestants to choose nine
players: one QB (quarterback), two RBs (running backs), three WRs (wide receivers),
one TE (tight end), one K (kicker), and a team defense, with combined total salaries not
to exceed $60,000.00. Below is an excerpted screenshot of a blank lineup sample; a true
and correct copy of the sample contest entry page is attached as Exhibit R.
25
31.
Once a player is added to a contest entry lineup, his salary is deducted from the
available pool of $60,000.00. Player salaries can vary widely. For example, 2014 NFL
MVP Aaron Rodgers has a set salary of $8,900.00; by contrast, third quarterback for the
Carolina Panthers Joe Webb has his salary set at a level just over half of Rodgerss, at
$4,800.00. Below are excerpted screenshots of the player information windows; true and
correct copies of the windows are attached as Exhibit S.
26
27
32.
Additional information regarding how FanDuel sets player salaries was available
on the FanDuel Insider page Fantasy Football 2015: The Basics of FanDuel NFL
Pricing, located at https://www.fanduel.com/insider/2015/07/02/fantasy-football-2015the-basics-of-fanduel-nfl-pricing/. The page included a video entitled FanDuel New
Player Guide Vol. 2: The Basics Of FanDuel Pricing featuring Brandon Marianne Lee,
FanDuel Insider describing how FanDuel sets player salaries. According to Lee, Each
player has a dollar value: a price that approximates his worth. Our small army of
beautiful minds puts every NFL player into a proprietary algorithm that generates player
values. Youll find that pricing matches up with expected performance. Stars have star
prices, but price is no guarantee. The reigning MVP could have a bad game, and some
guy youve never heard of could go 40 points. Below are true and correct screenshots of
three frames from the video; the full video downloaded from the FanDuel website on
November 6, 2015 is attached as Exhibit T.
28
33.
I returned to the FanDuel Lobby page and clicked on the banner for New to
FanDuel Basketball? Heres everything NBA, literally videos, tips, news & more.
From there, I was directed to the FanDuel Insider NBA Guide page at
29
https://www.fanduel.com/insider/nba-guide/?t=lobby. The page included tips to help

you out on the FanDuel hardwood for contest players of varying levels of expertise:
Rookie, Starter, and Legend.
34.
Under the Rookie section, information included:
FanDuels NBA salary cap is $60,000, and you must have nine players on your
roster, which means you can spend an average of $6,666 on each player.
An example of a March 2015 line-up that earned an intrepid FanDuel player

$6,000 off of a $1 investment.
A true and correct copy of the NBA Guide page is attached as Exhibit U.
FanDuel Sample Contest Entry
35.
On November 4, 2015, I entered a FanDuel contest scheduled to go live later that
day entitled $25K Wed NBA Shot #2 ($25K Guaranteed). The entry fee for the contest
was listed at $2.00 for access to a guaranteed prize pool of $25,000.00; cash prizes
ranging from $5.00 to $2,000.00 would be paid to the top 2,775 performing players. At
the time, 11,646 entrants were already registered for the contest. Prize payouts for the
top five finishers were listed as $2,000.00, $1,000.000, $750.00, $500.00, and $400.00.
According to the contest information, I was to pick a team of 9 players from among the
20 NBA teams playing on November 4, 2015: Boston Celtics, Indiana Pacers, San
Antonio Spurs, Washington Wizards, Philadelphia 76ers, Milwaukee Bucks, Toronto
Raptors, Oklahoma City Thunder, Orlando Magic, Houston Rockets, New York Knicks,
Cleveland Cavaliers, Brooklyn Nets, Atlanta Hawks, Portland Trail Blazers, Utah Jazz,
Sacramento Kings, Phoenix Suns, Los Angeles Clippers, and Golden State Warriors.
Below are excerpted screenshots of the contest summary windows; true and correct
30
copies of the windows are attached as Exhibit V.
36.
I clicked the green Enter this contest button and was directed to the $25K Wed
NBA Shot #2 ($25K Guaranteed) player selection page at

https://www.fanduel.com/games/13439/contests/13439-18003089/enter. I was prompted
to select nine NBA players -- two PGs (point guards), two SGs (shooting guards),
31
two SFs (small forwards), two PFs (power forwards), and one C (center) -- from
among those that were playing in games that night. Players for each position were listed
along with an associated salary, and I was only permitted to submit a lineup that stayed
under the predetermined salary cap of $60,000.00. Further, a posted notice indicated that
the Lineup locks @ 7:00PM Wednesday, i.e., I would be permitted to make any
alterations to my lineup up until the start of the first live game of the evening. Below is
an excerpted screenshot of the roster selection webpage; a true and correct copy of this
webpage is attached as Exhibit W.
37.
I selected a team that complied with the predetermined salary cap and team
position distribution. Provided that I stayed under the salary cap, I was free to select any
collection of NBA players competing that night. No selection decision I made influenced
32
or impacted other contest entrants (i.e., I could not block another entry from utilizing a
certain player). The nine players I selected had a total combined salary of $60,000.00,
maximizing my FanDuel-set salary allotment. A true and correct copy my selected
lineup is attached as Exhibit X.
38.
I clicked Enter to submit my chosen lineup into the contest. A pop-up window
confirmed my entry with the message: Success! Youve submitted your lineup. What
now? I was presented with the opportunity to enter the same lineup into other contests
with prizes ranging from $0 (for qualifier contests) to $1,000,000.00. Below is an
excerpted screenshot of the contest entry confirmation window; a true and correct copy of
the window is attached as Exhibit Y.
39.
I clicked No thanks, go to my lineup and was directed to a page displaying the
information for my Entry ID S278952762 at

https://www.fanduel.com/entry/278952762?seatCreated=true. In the upper right corner of
the page, below my username, the balance in my account was decreased by the amount of
33
the predetermined $2.00 entry fee to $8.00. In addition, at the top of the page was a
notice that with my entry, I had earned 20 FDP (FanDuel Points) and $0.08 of
Pending Bonus released on settlement. Below is an excerpted screenshot of the
webpage with the contest entry confirmation message; a true and correct copy of the
webpage is attached as Exhibit Z.
40.
The contest offered was for a single night, November 4, 2015, and was based
solely on the real-life performance of NBA athletes during games played live that night.
41.
Once live play began at 7:00 p.m., I could track the progress of my active entry,
including individual player performance, my accumulated score, and my relative standing

among the 14,367 contest entries, by navigating to https://www.fanduel.com/live.
42.
On November 5, 2015, I returned to the FanDuel scoring page for my contest at
34
https://www.fanduel.com/games/13439/contests/1343918003089/entries/278952762/scoring, where I was able to view the completed contest

results. The roster I selected for my $2.00 entry in the November 4, 2015 $25K Wed
NBA Shot #2 ($25K Guaranteed) did not result in any cash winnings.
43.
User lastchanse18s top score of 339.60 points was awarded the first place
contest prize of $2,000.00. The second place finisher won $1,000.000 with a score of
333.20 i.e., 6.40 points behind the top winning entry. The top five scores from the field
of 14,367 entries scored between 331.60 and 339.60 points a point range of 6.00 points
and cash winnings range of $400.00 to $2,000.00. The lowest cash prize for this contest
was $4.63.
44.
Below are excerpted screenshots of the contest page, showing the results of my
November 4, 2015 contest entry; a true and correct copy of the webpage reflecting the
contest results is attached as Exhibit AA.
35
INDEX NO. 453054/2015

NYSCEF DOC. NO. 43
AFFIDAVIT OF VANESSA IP PERTAINING TO DRAFTKINGS, INC.
State of New York
)
)
County of New York )
ss.:
I, VANESSA IP, hereby declare as follows:

1.
I am an investigator in the Internet Bureau of the Office of the New York
Attorney General (NYAG). . My work address is 120 Broadway, New York, NY

10271.
2.
I have been assigned to the NYAGs investigation of DraftKings, Inc.
(DraftKings). I have attached as exhibits hereto website screenshots, videos, and other
documents associated with the company.
DraftKings Television Commercials
3.
On October 26, 2015, I visited the iSpot.tv website from a computer located in my
office. According to the websites About page at http://www.ispot.tv/aboutus, We

[iSpot.tv] are the go-to platform for Brands, Agencies, Networks, Actors and Developers
to track in real-time paid TV media and related earned digital activity across social,
search & video Our proprietary technology tracks TV Commercials, Movie Trailers
and Show Promotions across the top networks in real-time. I navigated to the webpage
for DraftKings TV Commercials at www.ispot.tv/brands/IEY/draftkings. The webpage
listed a selection of videos for DraftKings commercials that had aired on television, along
with information regarding the frequency and recent times and locations of those airings.
4.
I viewed the DraftKings commercial entitled Fantasy Golf Millionaire Maker at
http://www.ispot.tv/ad/7cTn/draftkings-fantasy-golf-millionaire-maker. The voiceover

audio stated taking home your share is simple: just pick your sport, pick your players,
and pick up your cash. Thats it. Its the simplest way of winning life-changing piles of
cash. According to iSpot.tv, this commercial had aired 2,775 times nationally as of
October 26, 2015, including on Sunday, October 25, 2015 during Poker Night in
America, a show on the CBS Sports Network. Attached as Exhibit A is a true and
correct copy of the iSpot.tv webpage for the commercial.
5.
Below are true and correct screenshots of three frames from the Fantasy Golf
Millionaire Maker commercial; the full video downloaded from the iSpot.tv web page
on October 26, 2015 is attached as Exhibit B.
6.
I viewed the DraftKings commercial entitled Milking a Two-Legged Goat at
http://www.ispot.tv/ad/7FuC/draftkings-milking-a-two-legged-goat. The voiceover audio

stated, They make winning easier than milking a two-legged goat Do you want to be a
fantasy football hero? Do you want it to be easy and fun with a shot to win millions?
Below are true and correct screenshots of three frames from the commercial; the full
3
video downloaded from the iSpot.tv web page on October 26, 2015 is attached as Exhibit
C.
7.
I viewed the DraftKings commercial entitled Giant Check at
http://www.ispot.tv/ad/Ak1x/draftkings-fantasy-football-giant-check. The voiceover

audio stated The giant check is no myth, no mirage, no fools gold... Draft your team
and win cash in the same week simple as that. According to iSpot.tv, this commercial
had aired 5,006 times nationally as of October 26, 2015. Attached as Exhibit D is a true
and correct copy of the iSpot.tv web page for the commercial.
8.
Below are true and correct screenshots of five frames from the Giant Check
commercial; the full video downloaded from the iSpot.tv web page on October 26, 2015
is attached as Exhibit E.
DraftKings Account Sign-Up

9.
On November 2, 2015, I visited the DraftKings website at www.draftkings.com. I
clicked on the Play Now button to sign up for a new account. A true and correct copy
of the DraftKings homepage is attached as Exhibit F.
10.
After providing a username, email address, password, country, and state, I
checked a box to agree to the terms of use and privacy policy, and to confirm my age as
over 18.
11.
I was presented with an onscreen 10-minute Limited Time Offer to receive a
FREE Entry ($3 value) to play in a paid contest and DOUBLE CASH, up to $600!
The upper right of the page touted: Win real money, Hassle free cash out and Over
$200 million guaranteed in prizes. A true and correct copy of the DraftKings Deposit
page is attached as Exhibit G.
12.
I navigated to the DraftKings Lobby page at
https://www.draftkings.com/lobby#/featured, from which I could view all contests open

on the DraftKings website, separated by sport. DraftKingss daily fantasy sports
offerings included contests for Major League Baseball (MLB), National Association for
Stock Car Auto Racing (NASCAR), the National Basketball Association (NBA), the
National Football League (NFL), the National Hockey League (NHL), the Professional
Golfers Association (PGA), NCAA college basketball, NCAA college football, mixed
martial arts, soccer, and eSports (i.e., competitive video gaming).
13.
The top featured contest was the NFL $6M Millionaire Maker with a top prize
of $1 million dollars awarded to the first place finisher; the entry fee for this contest was
$20.00. A banner above the contest list urged, Become the next fantasy millionaire in
the NFL Week 9 $6M Millionaire Maker. Top Prize gets $1 Million!
14.
Another featured contest with an entry fee of $3.00 was the NFL $1.25M
Play-Action with total prize winnings of $1.25 Million Guaranteed. Below is an

excerpted screenshot of the DraftKings Lobby; a true and correct copy of the webpage
is attached as Exhibit H.
15.
DraftKings entry fees for NFL-based contests ranged from $0.25 to $10,600.00.
Cash prize winnings generally ranged from $0.50 to $1,000,000.00. Below are excerpted
screenshots of the DraftKings Lobby and contest detail pages; true and correct copies
of the windows attached as Exhibit I.
10
11
12
16.
At the bottom of the Lobby page, I clicked on the link to 100% Legal and
was directed to DraftKingss Why it is Legal page at

https://www.draftkings.com/help/why-is-it-legal. To the right of the box announcing
PLAYING ON DRAFTKINGS IS 100% LEGAL IN THE USA lists 5 GREAT
REASONS TO PLAY FANTASY SPORTS ON DRAFTKINGS, including
No commitment get your sweat on in the industry's highest paying
guaranteed tournaments; and
Build your team in only minutes and watch your scores update live
online.
Below is an excerpted screenshot of the DraftKings Why it is Legal page; a true and
correct copy of the webpage is attached as Exhibit J.
17.
I navigated to DraftKingss Frequently Asked Questions page at
https://www.draftkings.com/help/faq. Under the section headed Basics, the answer to

13
What Types of Contests Do you Offer? provided a description of the types of contests
available on the website. The list included:
GPP (Guaranteed Prize Pool) Contests GPP's are contests that payout
the entire prize pool, regardless if the contest fills or not. These contests are
labeled in orange text in the contest lobby;
Head-to-Head Winner takes all in these one-on-one contests; and
50/50s Teams finishing in the top-half of the field win cash no matter
the number of entries.

A true and correct copy of the page with the contests information section is attached as
Exhibit K.
18.
On the same Frequently Asked Questions page, under the section headed
Gameplay/Prizes, was the question How Are Contests Scored? The answer stated,
Our contests have a points-based scoring format. Please see the specific sport for
details, below which was a list of links to pages for each of the sports covered by
DraftKings: MLB (for Major League Baseball), NFL (for National Football
League), NBA (for National Basketball Association), NHL (for National Hockey
League), CBB (for college basketball), CFB (for college football), PGA (for
Professional Golfers Association), SOC (for soccer), MMA (for mixed martial arts),
and NAS (for National Association for Stock Car Auto Racing). A true and correct copy
of the page with the scoring information section is attached as Exhibit L.
19.
Clicking on the link for NFL, I was directed to the Daily Fantasy Football
League Rules page at https://www.draftkings.com/help/nfl, where I was able to view

information on how to play and score Daily Fantasy Football league contests.
14
20.
Under the Contest Rules section, the list of rules for Daily Fantasy Football
play, included:
In each contest, participants will be assigned a fixed salary cap of $50,000 that
they can use to draft their entire 9-player roster
Contest results and winners will be based on the total points scored across each
customer's 9 player roster.
The Team Roster section further explained that Rosters will consist of 9
players and must include players from at least 2 different NFL teams, and representing at
least 2 different football games. Further, [t]he 9 roster positions are: QB [quarterback],
RB1 [first running back], RB2 [second running back], WR1 [first wide receiver], WR2
[second wide receiver], WR3 [third wide receiver], TE [tight end], FLEX (RB/WR/TE),
and DST [defense/special teams].
21.
The Point Scoring section listed a series of real-life events that could occur over
the course of a football game, and the contest points associated with each of those events.
For example, a roster including an offensive player scoring a Passing TD (or passing
touchdown) in a game would earn four points; a Blocked Kick by the designated
defensive team would earn two points. Different contest point values were associated
with the number of game points allowed by the defensive team, e.g., 10 points for 0
Points Allowed, 7 points for 1-6 Points Allowed, and 0 points for 21-27 Points
Allowed. For games in which a roster-selected defensive team allowed more than 28
points, 1 to 4 points would be deducted from a contest score. Other events, such as
Interception or Fumble Lost also resulted in contest point penalties.
22.
Additional information regarding DraftKingss NFL scoring policies were listed
15
under the Additional Rules section. For example, the page included a TRADED
PLAYER POLICY for instances when a player is traded (changes teams) after contests
have been posted. Depending on the amount of time left before the next game start for
the affected sport/league, the policy stated, in part, that [t]raded players will not
accrue fantasy points. Where possible, DraftKings will add warnings to Draft Screens
once it is known that a player has been traded and therefore ineligible to register points.
Additionally, users may be notified via email and/or other notification features on the
site.
23.
The page also stated that regarding GAME CANCELLATIONS AND
POSTPONEMENTS for NFL games:

Players in any postponed or rescheduled game will be eligible to score points
only if the rescheduled game is played by Wednesday of the following week. If the
game is canceled or rescheduled outside of this range, all players in that game
will receive zero points.
24.
For SUSPENDED OR SHORTENED GAMES:

If the NFL declares a game "suspended" then the statistics that are generated
the day the game is originally scheduled will be used.
25.
Regarding SCORING REVISIONS:

During each game, DraftKings receives live scoring updates from our stats
provider, STATS LLC In the event [the leagues and stats provider revises box
scores after the final box score has been released], the player scores on
DraftKings will not be updated and the settlements will not be revised.
Below is an excerpted screenshot of the point-scoring section of the Daily Fantasy
16
Football League Rules page; a true and correct copy of the full webpage is attached as
Exhibit M.
26.
I navigated to the Daily Fantasy Basketball League Rules page at
https://www.draftkings.com/help/nba, where I was able to view similar information on

how to play and score Daily Fantasy Basketball league contests.
27.
The rules listed under Contest Rules on the Fantasy Basketball League page
were similar to those listed on the Fantasy Football League page, with the modification
that contest participants could use a fixed salary cap of $50,000 to draft their entire 8
17
player roster and [c]ontest results and winners will be based on the total points scored
across each entrant's 8 player roster. For Fantasy Basketball League contests, the 8
roster positions were listed as PG [point guard], SG [shooting guard], SF [small forward],
PF [power forward], C [center], G [guard], F [forward], and UTIL [any player position].
28.
A similar point-system structure awarded points based on player events that could
occur over the course of a basketball game, e.g., one contest point for each point scored
in a game by a player on an entrants roster, 1.25 points for a rebound, 2 points for a
block, and -0.5 points for ball turnover. Below is an excerpted screenshot of the Daily
Fantasy Basketball League Rules page; a true and correct copy of the full webpage is
attached as Exhibit N.
29.
Under the section headed Gameplay/Prizes, was the question When Do Lineup
Entries and Edits Close? According to DraftKings rules, full rosters are fully editable
until the contest begins at the scheduled start time of the first eligible game. Once the
contest starts, editing for individual players locks when the scheduled start time for the
selected players game begins. Below is an excerpted screenshot of the lineup edits rule
page; a true and correct copy of the webpage is attached as Exhibit O.
18
30.
A video titled How to Play on DraftKings, published on Aug 18, 2015 by
DraftKings TV on the DKTV YouTube channel also explained the contest entry
process: Pick your contest and youre ready to draft Your goal is to build the best
nine-man roster under the $50,000 salary cap Once your lineup is complete, click
submit and thats it. Below are true and correct screenshots of three frames from the
video; the full video downloaded from
https://www.youtube.com/watch?v=xE4VAhm9sqs on November 6, 2015 is attached as
Exhibit P.
19
31.
Player salaries can vary widely, and are set by DraftKings based on expected
player performance. DraftKingss How to Play page at

https://www.draftkings.com/help/how-to-play states under the Draft Your Team!
20
section: Player salaries are determined by their performance, and are not related to the
player's actual compensation. Below is an excerpted screenshot of the How to Play
page; a true and correct copy of the webpage is attached as Exhibit Q.
32.
For example, 2014 NFL MVP Aaron Rodgers has a set DraftKings salary of
$7,400.00; by contrast, third quarterback for the Carolina Panthers Joe Webb has his
salary set at approximate 2/3 that value, at $5,000.00. Below are excerpted screenshots
of the player information windows; true and correct copies of the windows are attached
as Exhibit R.
21
33.
DraftKings provides users with research and guidance on player strategy in its
Playbook section. On http://playbook.draftkings.com/nfl/tao-bales-value-reallyvaluable/, an October 22, 2015 post by fantasy sports writer Jonathan Bales titled Tao of
Bales: Is Value Really That Valuable? states that [a]t its core, daily fantasy is a game
of finding value; we all want players who are underpriced relative to how they might
perform. He continues, Really, were trying to think about players in terms of
probabilities. Whats the probability this player scores X points?
34.
To illustrate the value of using probability-based ceiling projections in selecting
player lineups, Bales includes a line graph titled the Odds of Reaching X Points on
DraftKings. Below is an excerpted screenshot from the October 22, 2015 Bales article;
a true and correct copy of the webpage is attached as Exhibit S.
22
35.
In a September 10, 2015 post titled The Tao of Bales: Week 1 and Dealing with
Uncertainty, at http://playbook.draftkings.com/nfl/the-tao-of-bales-week-1-and-dealingwith-uncertainty/, Bales writes, How many fantasy points is Dez Bryant going to score
this week against the Giants? I have no idea. He continues, theres actually a pretty
good philosophical argument to be made that no one will ever be able to [come within
five points of Bryants projection even half the time] just because football is filled with
randomness.. Bryant could get shut down all game and then break a tackle late for an 80yard score. Or he could be wide open deep and lose the ball in the lights. Shit happens.
Theres a certain level of variance in sports outcomes that we probably just cant
overcome when making predictions, even at a theoretical level. A true and correct copy
of the webpage containing Baless September 10, 2015 article is attached as Exhibit T.
DraftKings Deposit
36.
On November 3, 2015, I logged on to my DraftKings account and navigated to the
Deposit page at https://www.draftkings.com/account/depositnewvisitorinterstitial. I

23
was again presented with an onscreen 10-minute Limited Time Offer to receive a
FREE Entry ($3 value) to play in a paid contest and DOUBLE CASH, up to $600!
I selected the default option of a $25.00 deposit with $25.00 Free Bonus, entered my
credit card account information, and clicked Continue.
37.
At the next page, I was prompted to enter billing information: name, billing
address, and telephone number. I provided the requested information and clicked
Deposit. A true and correct copy of the page is attached as Exhibit U.
38.
I was directed to the DraftKings Lobby page, which listed the contests open for
entry. Prominently featured promotions included NFL $15M World Championship. Top
Prize gets $5 Million! and Fantasy Football Millionaire Maker / Turn $20 into $1
Million / * * $6 Million Guaranteed * *. An onscreen message noted: Deposit
Confirmation / Your $25.00 deposit has been accepted and your confirmation number is
76PRWG22KW4KYPTK7YW7. Your 100% deposit bonus has also been activated. At
the top right of the screen, below my username, my balance was indicated as $25.00.
Below is an excerpted screenshot of the DraftKings Lobby page with deposit
confirmation message; a true and correct copy of the webpage is attached as Exhibit V.
24
DraftKings Sample Contest Entry

39.
On November 3, 2015, I entered a DraftKings contest scheduled to go live later
that day entitled NBA $100K Zone [$100,000 Guaranteed]. According to the contest
summary provided, [t]his 23000-player contest features $100,000.00 in total prizes and
pays out the top 4600 finishing positions. First place wins $10,000.00. The contest
indicated a wager amount of $5.00; at the time, 9,346 entrants were already registered for
the contest. Prize payouts for the top five finishers were listed as $10,000.00,
$5,000.000, $2,500.00, $1,500.00, and $1,000.00. Below is an excerpted screenshot of
the contest summary page; a true and correct copy of the webpage is attached as Exhibit
W.
25
40.
From the summary page, I clicked on the Draft Team button and was prompted
to select a lineup of eight NBA players that were playing that night. Players for each
position were listed along with an associated salary, and I was only permitted to submit
a lineup that stayed under the predetermined salary cap of $50,000.00. Below is an
excerpted screenshot of the contest selection webpage; a true and correct copy of this
webpage is attached as Exhibit X.
26
41.
I selected a team that complied with the predetermined salary cap and team
position distribution. Provided that I stayed under the salary cap, I was free to select any
collection of NBA players from teams competing that night: Chicago Bulls, Charlotte
Hornets, Indiana Pacers, Detroit Pistons, Toronto Raptors, Dallas Mavericks, Denver
Nuggets, Los Angeles Lakers, Atlanta Hawks, Miami Heat, Orlando Magic, New Orleans
Pelicans, Memphis Grizzlies, or Sacramento Kings. No selection decision I made
influenced or impacted other contest entrants (i.e., I could not block another entry from
utilizing a certain player). The eight players I selected had a total combined salary of
$50,000.00, maximizing my DraftKings-set salary allotment. A true and correct copy of
27
my selected lineup is attached as Exhibit Y.

42.
I clicked on the Submit button to enter my lineup into the contest. A pop-up
window confirmed my entry into the NBA $100K Zone [$100,000 Guaranteed] @
11/03/2015 7:00 pm. The total contest cost was indicated at $5.00. By default, a
checkbox confirmed my agreement to enter the contest and to have $5.00 debited from
my DraftKings account. I clicked on the button to Enter Now. Below is an excerpted
screenshot of the contest entry confirmation window; a true and correct copy of the
window is attached as Exhibit Z.
43.
I was redirected to the DraftKings Lobby page, and an onscreen message noted:
Congratulations, you're in! Your lineup has been entered into the NBA $100K Zone
[$100,000 Guaranteed]. In the upper right corner of the page, below my username, the
balance in my account was decreased by the amount of the predetermined $5.00 entry fee
to $20.00.
Below is an excerpted screenshot of the webpage with the contest entry
confirmation message and my entered lineup for the NBA $100 Zone contest; a true and
correct copy of the webpage is attached as Exhibit AA.
28
44.
The contest offered was for a single night, November 3, 2015, and was based
solely on the real-life performance of NBA athletes during games played live that night.
45.
Once live play began at 7:00 p.m., I could track the progress of my active entry,
including my accumulated FPTS [fantasy points] and relative standing among the
23,000 contest entries, by navigating to the My Contests webpage at
https://www.draftkings.com/mycontests. Below is an excerpted screenshot of the My
Contests webpage during the live contest; a true and correct copy of the webpage is
attached as Exhibit BB.
29
46.
On November 4, 2015, I returned to DraftKingss My Contests webpage and
clicked on the History button to view the completed contest results. The roster I
selected for my $5.00 entry in the November 4, 2015 NBA $100K Zone [$100,000
Guaranteed] contest did not result in any cash winnings.
47.
I clicked on the Results button and was directed to the Gamecenter page at
https://www.draftkings.com/contest/gamecenter/13435116?uc=203334958 to view more

detailed information about the contests entries.
48.
According to the Standings board, the player in first place finished the contest
with a score of 355.75 FPTS, earning the top cash prize of $10,000.00. The second place
finisher won $5,000.000 with a score of 355.5 FPTS i.e., 0.25 FPTS behind the top
winning entry. The top five results in this contest of 23,000 entries scored between 349.5
and 355.75 FPTS a point range of 6.25 FPTS and cash winnings range of $1,000.00 to
30
$10,000.00. Below is an excerpted screenshot of the Gamecenter page; a true and

correct copy of the webpage reflecting the contest results is attached as Exhibit CC.
31
Colonel Marlin A. Flores, 1990-91 La. Op. Atty. Gen. 65 (1991)
1990-91 La. Op. Atty. Gen. 65 (La.A.G.), La. Atty. Gen. Op. No. 91-14, 1991 WL 575105
Office of the Attorney General
State of Louisiana
Opinion No. 91-14
April 23, 1991
*1 48 - GAMBLING
LSA-R.S. 14:90
Certain 900 number telephone service constituted gambling under the statute with the
assumption that service was conducted as a business.
Colonel Marlin A. Flores

Deputy Secretary
Louisiana State Police
Post Office Box 66614
Baton Rouge, Louisiana 70896
Dear Colonel Flores:
Your opinion request of January 3, 1991 questions the legality of a certain 900 number
service, specifically whether the service constitutes a violation of La.R.S. 14:90.
La. R.S. 14:90 provides that;
Gambling is the intentional conducting, or directly assisting in the conducting, as a business, of
any game, contest, lottery, or contrivance whereby a person risks the loss of anything of value in
order to realize a profit.
Under the Rules and Regulations of 900 Fantasy Football, participants select a fantasy team
with Ciscorp, Inc. through either a 900 number which is represented as costing the caller $2.00
per minute or an 800 number which would not subject the caller to any cost. It is noted in your
opinion request that the 800 number (800-825-4953) contained in the media ad is not operable
or no longer a working number. This fact has been confirmed by this office.
After selecting a team, elements of the team or players can be varied by trades made only
over the 900 number. Based on a point system taking into consideration the performance of each
player or unit of the team, cash prizes are awarded to the participant with the highest weekly
2015 Thomson Reuters. No claim to original U.S. Government Works.
point total and a grand prize is awarded at the end of the season.
The 900 Fantasy Football service conducted by Ciscorp, Inc. meets all elements of the
gambling statute, assuming only that the service is conducted as a business, which it appears to
be.
Whether an element of skill is involved in selection of the team or individual players is relevant
to determination of whether the activity is a lottery, however it is not dispositive of the issue of
whether the activity constitutes gambling.
Betting on horse races or football games is not considered as constituting a lottery, see Gandolfo
vs. La. State Racing Commission, 78 So.2d. 504, (La. S.Ct.,1954), however the activity still
constitutes a game, contest, or contrivance.
In Gandolfo the Supreme Court recognized the legislatures power to statutorily permit
regulated horse racing in conjunction with the statutory gambling prohibition, La. R.S. 14:90.
No such legislative exception is applicable to 900 Fantasy Football.
Nor does the allegation that some players can select a team without incurring toll charges, which
does not appear to be the case, create an exception to La. R.S. 14:90.
The statute is applicable where a person risks the loss of anything of value in order to realize a
profit.
That some person might be able to participate in 900 Fantasy Football without incurring any
costs might remove that particular transaction from the scope of the statute, however with
respect to all other persons who have incurred costs in order to participate, the activity
constitutes gambling.
*2 Therefore based on the facts presented and assuming that the activity is conducted as a
business it is the opinion of this office that 900 Fantasy Football constitutes gambling
prohibited by La. R.S. 14:90.
Sincerely,
William J. Guste, Jr.
Attorney General
By: Thomas A. Warner, III
Assistant Attorney General
1990-91 La. Op. Atty. Gen. 65 (La.A.G.), La. Atty. Gen. Op. No. 91-14, 1991 WL 575105
End of Document

COUNTY OF NEW YORK
-------------------------------------x
In the Matter of the Application of
:
DRAFTKINGS, INC., A Delaware Corporation,
:
:
:
:
:
:
against
:
:
:
:
ERIC T. SCHNEIDERMAN,
:
in his official capacity as Attorney General of the
:
State of New York; and
:
STATE OF NEW YORK,
:
Respondents/Defendants.
:
------------------------------------ x
Petitioner/Plaintiff,
Index No.
IAS Part
Justice
VERIFIED PETITION
Petitioner/Plaintiff DraftKings, Inc. (DraftKings), by and through its attorneys, Gibson,

Dunn & Crutcher LLP, as and for its Verified Petition and Complaint, alleges as follows:
1.
This action seeks to stop New York Attorney General Eric Schneiderman from
carrying out his threat to banish from this State a lawful industry beloved by hundreds of
thousands of New Yorkers. The Attorney General, misreading New Yorks gambling laws, is
attempting to bully DraftKingsa celebrated company offering Daily Fantasy Sports (DFS) to
millions of Americansand its vendors into immediately shutting down DraftKings New York
operations before it even has a chance to defend itself. Using strong-arm tactics and defying the
rule of law, the Attorney General earlier this week sent a self-styled cease-and-desist letter to
DraftKings, accusing it of engaging in prohibited gambling activities and supposedly giving
DraftKings five business days to cease and desist before any enforcement proceeding would be
filed. But the Attorney Generals staff then turned around and contacted DraftKings business
partners, threatening to take action against them unless they immediately ceased performing
services for DraftKings in New York. Emergency declaratory and injunctive relief is therefore
necessary to bar the Attorney General from continuing to abuse his power and to prevent the
irreparable harm that will result from it.
2.
Fantasy sports have become a national pastime. DFSa natural and more
sophisticated outgrowth of traditional season-long fantasy sportsis enjoyed by millions of

Americans. Although DraftKings only entered the DFS market in April 2012, today it is one of
the nations two largest and most successful DFS operators. It serves more than two million
customers across 44 states, including New York. Indeed, DFS companies have operated openly
and permissibly in New York for nearly a decade.
3.
This past Tuesday evening, November 10, without any prior notice, consultation,
deliberation or opportunity to be heard, the New York Attorney General publicly announced that
he considered DraftKings and another DFS operator, FanDuel, to be promoting illegal
gambling and demanded they cease and desist offering DFS contests in New York. The
Attorney Generals decree was communicated in a four-page letter devoid of judicial authority or
coherent analysis. Indeed, the Attorney Generals letter contains damning admissions that
undermine his newfound position. Within hours of his announcement, the Attorney General took
to the airwaves to publicly slander DraftKings and FanDuel, alleging that the companies are the
leaders of a massive, multi-billion-dollar scheme intended to evade the law and fleece sports fans
across the countrya malicious falsehood unwarranted by the facts and unbecoming of a public
official. DraftKings and FanDuel promptly announced that they intended to exercise their First
Amendment rights to petition the courts and seek judicial review from an impartial arbiter.
4.
In the face of DraftKings resolve to protect itself in the courts, the Attorney
General resorted to acts of retaliation and intimidation. He claimed that his banishment was
effective immediatelydespite the explicit five-day notice period mandated by the very
statutes he cites in his letter. When DraftKings would not back down, the Attorney General
resolved to act as judge, jury, and executioner. His aides targeted DraftKings most important
business partners and vendors, including the payment processors on which it depends,
threatening them with adverse action if they did not immediately stop performing their
contractual obligations to DraftKings in New York.
5.
The Attorney Generals actions constitute a shocking overreach. He has
unleashed an irresponsible, irrational, and illegal campaign to destroy a legitimate industry,

intending to deprive hundreds of thousands of New Yorkers of the use and enjoyment of these
services. Adding insult to injury, he has done so in defiance of New York law, which plainly
permits games of skill such as DFS. Indeed, academic scholarship, skills studies, and
commentary conclusively establish that DFS is a classic game of skill and entirely legal under
New York law. That evidence was fully available to the Attorney General, but he ignored
it. Since the Attorney General first contacted DraftKings five weeks ago to inquire about
employee gameplay and data security issues, DraftKings has provided its full cooperation, twice
meeting with his office, communicating regularly by phone, responding to information requests,
and producing reams of documents. Nevernot onceduring any of those communications
did the Attorney General even suggest that he was considering, for the first time ever, declaring
DFS illegal in New York. Instead, the Attorney General chose to proceed in secret, reaching an
illogical and incorrect interpretation of law, and then trying to strong-arm industry participants
into submission before having their day in court. To ban an entire industry from the State,
without even once informing these companies that such a thing was possible or affording them
any opportunity to be heard, violates the most basic tenets of fairness and due process.
6.
Because the Attorney General rushed to judgment without engaging in any
deliberation or discussion, he got it wrong, proffering an incoherent and self-defeating

interpretation of New York law that cannot stand. The Attorney Generals own reasoning
undermines the position he has strained to reach. The Attorney Generals cease-and-desist letter
claims that DFS is a game of chance, not skill. Yet in the very next breath, the Attorney General
admits that a minority of experienced, skilled players reaps the vast majority of winningsa fact
that confirms DFS is, in fact, necessarily skill-based. The Attorney General also acknowledges
that the legality of traditional fantasy sports has never been seriously questioned in New
York. Yet daily fantasy sports is, in fact, grounded in the same game of skill as traditional
fantasy sports played over an entire season and, indeed, is even more heavily skill-baseda fact
that the Attorney General would have understood had he bothered to review expert opinions and
skills studies readily available to him.
7.
Advancing a patently incorrect interpretation of New York law belied by its plain
language, the Attorney General is now an outlier who stands alone. No New York official
including the Attorney Generals immediate predecessor and now-Governor Andrew Cuomo
ever found DFS to be illegal. And in New Jerseywhere the gambling law is essentially
identical to New Yorksa federal court recently ruled that fantasy sports leagues did not violate
the states gambling statutes, finding that [t]he success of a fantasy sports team depends on the
participants skill in selecting players for his or her team . . . . Humphrey v. Viacom, Inc., 2007
WL 1797648, at *2 (D.N.J. June 20, 2007) (emphasis added). As Massachusetts Governor
Charlie Baker proclaimed yesterday after participating in a fantasy sports contest for fun: Its a
game of skill. Thats exactly what DraftKings offers and New York law expressly permits
games of skill. That should end the inquiry.
8.
The irreparable harm that would result from the Attorney Generals threatened
shutdown is self-evident, and this Courts immediate intervention is necessary to prevent it. New
York is home to more than approximately 7% of DraftKings customers nationwide.
Furthermore, the Attorney Generals cease-and-desist letterand the adverse publicity attendant
to itare having a chilling effect on DraftKings business nationwide, as well as its ability to
attract new investors and partners. Moreover, the Attorney Generals letter is impeding
DraftKings ability to continue its relationships with its current investors and partners. Absent
emergency relief, the Attorney General will succeed in forcing DraftKings to shutter its New
York operations, harming not just the company, but hundreds of thousands of New Yorkers who
enjoy its gamesall prior to any judicial determination settling the question of the legality of
DraftKings operations. That outcome would make a mockery of due process by effectively
denying DraftKings its day in court, forcing it to shut down before it has even had the
opportunity to defend itself.
9.
Meanwhile, the equities here militate strongly in favor of urgent relief. After
conducting an abbreviated, five-week look into DFS, supposedly focused on consumer-related

issues, the Attorney General then rushed to ban an industry that has been operating openly and
honestly and permissibly in New York for nearly a decade. Not once during that time did any
Attorney General so much as suggest that those companies might be violating the law. Nothing
changed this week that required such a precipitous about-face on the Attorney Generals part.
The only thing that changed was this Attorney Generals mind. In short, there is no justification
for the Attorney Generals draconian rush to judgment, but his misguided conduct could have
devastating consequences for DraftKings. This Court should therefore bring an immediate halt
to the Attorney Generals irresponsible, irrational, and illegal actions here.
PARTIES
10.
Petitioner DRAFTKINGS, INC., is a Delaware corporation with its principal
place of business in Boston, Massachusetts.

11.
Respondent ERIC T. SCHNEIDERMAN is the Attorney General of the State of
New York. DraftKings brings this Article 78 proceeding against Mr. Schneiderman in his
official capacity.
12.
Respondent STATE OF NEW YORK (the State) is a sovereign State and is a
necessary party to this action.

JURISDICTION AND VENUE
13.
This Court has jurisdiction pursuant to Article 78 of the Civil Practice Law and
Rules (CPLR).
14.
Venue is proper because Respondent Schneidermans Division of Economic
Justice, Internet Bureau, is located in New York County, New York. Numerous meetings
between DraftKings and Respondents took place within New York County, including meetings
at which the parties discussed the services of DraftKings. Respondents violations of due
process also took place in New York County. See C.P.L.R. 506(b), 7804(b).
FACTUAL ALLEGATIONS RELATED TO ALL COUNTS
A.
DraftKings And Fantasy Sports Contests

15.
DraftKings provides an online platform for individuals to enter DFS contests with
friends, family, or other fantasy-sports enthusiasts.

16.
While DraftKings has offered DFS since approximately April 2012, DFS games
have been around at least since the launch of Fantasy Sports Live in June 2007. Since then, other
6
companies have entered the DFS marketplace, including FanDuel, which was founded in or
about 2009.
17.
Traditional fantasy sportswhich the Attorney General explicitly endorses as
legalhave existed since as early as the 1960s and provide fans with an opportunity to assemble
a fantasy team of real-life players to compete against other fantasy players. Traditional fantasy
contests generally span the entire season of a particular sporttypically four to six months.
18.
DFS was a natural and more sophisticated outgrowth of traditional season-long
fantasy sports. Like season-long games, DFS gave sports fans the opportunity to use knowledge,
skill, and evidence-based analytics to strategically assemble a team of players within firm salary
constraints. However, unlike season-long contests, DFS games last one day or one week
(depending on the sport), rather than for many months.
19.
DraftKings now offers DFS games in 44 states of the United States.
20.
DraftKings offers a variety of contest types (for example, large-field tournaments,
head-to-head contests, private leagues) in eleven different sports and e-sports.

21.
DraftKings users pay an entry fee to enter cash contests, while there is no entry
fee whatsoever to play in free contests. Winners of contests receive prizes. The prize structure
is always known ahead of time when users decide to pay an entry fee and enter a contest, and
does not change.
22.
DraftKings users lineups are comprised of between five and eleven real-world
athletes, and the success of those lineups depends on the combined performance in numerous
statistical categories of those real-world athletes across many real-world sporting events.
23.
DraftKings assigns a fictional salary to each real-world athlete who could be
selected to any fantasy team, as well as a salary cap that limits the sum of the salaries of
athletes that can comprise a users lineup. The same salary cap and fictional salaries of realworld athletes applies consistently to all players in a particular contest, which significantly
augments the skill required to participate and succeed in those contests. This mechanism
prevents DFS players from merely selecting the real-world athlete that they believe will score the
most points at every position in their lineupsuch a strategy would cause them to exceed the
salary cap. Rather, DFS players must consider the expected value of each real-world athlete, set
against the constraint to the salary cap, the overall composition of the roster, and the opportunity
cost of other real-world athletes who are not selected.
24.
While DraftKings sets the salaries and salary caps, it in no way has any control,
let alone full control, of the contests, entry fees, or fantasy lineups selected by its customers.
B.
DraftKings Contests Are Complex Games Of Skill, Not Gambling

25.
There is overwhelming evidence that DraftKings contests are complex games of
26.
To begin, the skill set required to play DFS successfully has nothing to do with
skill.
correctly predicting the ultimate win-loss outcome or margin of victory of a real-world sporting
event, such as a football or basketball game. The results of DraftKings fantasy contests are not
tethered to the outcomes of real-world sporting events. DraftKings customers do not place bets
on events outside of their control; rather, they pay entry fees to participate in a fantasy contest
against other contestants in which they compete by selecting the lineup that determines the
winners and losers.
27.
Furthermore, the restraints of the salary cap, coupled with the large number of
real-world players and statistical categories for which fantasy points are earned provide a nearly
infinite number of possible lineups and results, making DFS completely unlike the binary
outcomes in sports proposition bets. Instead, the relevant skill-set involves accurately projecting
8
the performance of individual athletes and strategically assembling individual athletes into
optimal lineups given the constraints of the salary cap.
28.
Sophisticated DFS players know that optimal lineup construction varies
dramatically by contest type. In a two-person contest or small league, for example, the optimal
lineup strategy primarily involves avoiding risk and maximizing the minimum expected fantasy
output of each lineup slot within the salary cap. In a large-field Guaranteed Prize Pool (GPP)
tournament, however, prizes are awarded only to the top-20% of entries, so outperforming a
single opponent or 50% of a tournament field is not sufficient. As a result, success in GPP
contests over time requires employing an extremely high level of skill and strategy that
emphasizes high-upside (but also high beta) lineups.
29.
The skill-based nature of DFS games has been repeatedly confirmed by leading
experts. For example, Ed Milleran MIT-trained engineer and noted author of gaming strategy
booksand Daniel Singerthe leader of McKinsey & Companys Global Sports and Gaming
Practicepenned an article published by Sports Business Daily entitled: For daily fantasy
sports operators, the curse of too much skill. Among Miller and Singers conclusions was the
assertion that in the first half of the 2015 MLB season, 91% of DFS player profits were won by
just 1.3% of players.
30.
Miller and Singer also identified two primary ways in which skilled users succeed
over unskilled users: (1) skilled users employ lineups that create covariance by choosing multiple
athletes from the same real-life team in order to produce the extreme DFS outcomesgood and
badthat are necessary to win a large field tournament; and (2) skilled users exploit salary cap
pricing inefficiencies by using sophisticated models to optimize their lineups by projecting which
athletes are most likely to under- or over-perform relative to their salary on a given day.
31.
To help measure the degree of control DFS users exercise over their outcomes,
DraftKings engaged Gaming Laboratories International (GLI) to conduct sophisticated

computer simulations involving DraftKings contests in MLB, NBA, NHL, and NFL.
32.
GLI tested the performance of DraftKings lineups generated at randomsubject
only to the constraint that 90% of the salary cap must be usedcompared to the results achieved
by top-earning DraftKings users. In each case, skilled users dramatically outperformed the
computer simulation in head-to-head contests: 83% of the time in MLB, 96% of the time in
NBA, 82% of the time in NHL, and 84% of the time in NFL.
33.
DFS is also fundamentally different than other games about which the issue of
skill versus chance has been previously debated, such as poker. Unlike poker, where players
start each hand on a non-level playing field based on the cards they are randomly dealt, in DFS,
each user starts in the exact same position and has complete and total control over the lineup the
user chooses, within the consistent constraint of the salary cap. The fact that a DFS user has no
control over player injuries is in no meaningful way different from the season-long fantasy sports
games the Attorney General has determined to be skill-based and lawful under New York law.
34.
In addition to reducing the impact of injured and underperforming players, DFS
also greatly enhances the degree to which users can learn from mistakes, develop their skills, and
refine their strategic thinking between contests over the course of one real-life season.
35.
DraftKings would have provided the Attorney Generals Office with this and
other conclusive evidence of the skill-based nature of DFS had the Office requested it, or
informed DraftKings at any time that it was evaluating the legality of DFS under New York State
law. It did not do so.
10
C.
Federal Statutory Recognition in 2006 That Fantasy Sports Activity Warrants

Distinct Recognition
36.
The Unlawful Internet Gambling Enforcement Act (UIGEA), 31 U.S.C.
5361-5367 (2006), prohibits any person engaged in the business of betting or wagering from
accepting any credit or funds from another person in connection with the latters participation in
unlawful Internet gambling. 31 U.S.C. 5363. Under UIGEA, unlawful Internet gambling
means to place, receive, or otherwise knowingly transmit a bet or wager by any means which
involves the use, at least in part, of the Internet in a jurisdiction where applicable federal or state
law makes such a bet illegal. 31 U.S.C. 5362(10)(A).
37.
Critically, however, Congress recognized that fantasy sports activities are
different in nature from the conduct UIGEA prohibits, by defining a bet or wager as the
staking or risking by any person of something of value upon the outcome of a contest of others, a
sporting event, or a game subject to chance, upon an agreement or understanding that the person
or another person will receive something of value in the event of a certain outcome, and then
excepting from that definition, among other things, participation in any fantasy or simulation
sports game . . . . See 31 U.S.C. 5362(1)(E)(ix)(I)-(III).
38.
In other words, federal law carves out fantasy sports games from the definition of
unlawful Internet gambling in this statute. DraftKings operates with careful attention to
UIGEA, to its exception for qualifying fantasy sports activities, and to the laws of the various
states.
D.
DraftKings Cooperation With The Attorney Generals Office

39.
DraftKings has operated in New York since 2012. It has advertised on broadcast-
television and radio stations, and entered sponsorship agreements with some of New Yorks
major sports teams. Despite operating throughout New York for the past three years, openly and
11
transparently, no state prosecutor has ever brought gambling charges against DraftKings or
questioned the legality of DraftKings games. Nor has any state prosecutor brought charges
against CBS, Yahoo!, or other companies that offer online DFS contests, which New York
residents have been playing for almost a decade.
40.
On or about October 6, 2015, Respondents announced publicly that they were
reviewing DFS. That same day, Respondents sent a letter to DraftKings, requesting that
DraftKings respond to certain information requests. Respondents inquiry and letter followed
press reports alleging that a DraftKings employee, Ethan Haskell, may have used nonpublic
DraftKings data to gain an unfair financial advantage in a contest that he entered, and won, on
FanDuel. Neither the press reports nor the letter indicated that Respondents were investigating
the legality of DraftKings business under state gambling laws.
41.
After receiving the letter, counsel for DraftKings immediately contacted
Respondents and communicated DraftKings desire to cooperate fully. On or about October 9,

2015, counsel for DraftKings met with representatives of Respondents.
42.
On or about October 15, 2015, DraftKings produced documents and provided a
written response to Respondents October 6 requests.

43.
On or about October 22, 2015, Respondents sent a second letter to DraftKings
requesting a limited number of documents, none related to the legality of DraftKings business
under state gambling laws.
44.
Counsel for DraftKings met again with representatives of Respondents on
October 23, 2015.

45.
On or about October 29, 2015, DraftKings produced documents and provided a
written response to Respondents October 22 requests.
12
46.
At the end of October, counsel for DraftKings made repeated requests for a third
meeting with Respondents. Counsel for DraftKings understood that Respondents would allow
DraftKings to answer questions and discuss the documents produced. Respondents ignored
DraftKings repeated requests for additional communication.
47.
Throughout DraftKings cooperation and dialogue with the Attorney General,
Respondents never once indicated that they were investigating DraftKings compliance with
gambling laws. Respondents never invited or permitted DraftKings to engage in dialogue that
would allow DraftKings to explain its contests and how those contests are compliant with state
gambling laws. For example, DraftKings was never given the opportunity to produce
independent studies demonstrating that its DFS contests are games of skill.
48.
Respondents gave no indication to DraftKings that they believed that DraftKings
contests may fall within the definition of gambling set forth in Section 225 of the New York
Penal Law or within any of the other gambling provisions in the New York Penal Law.
E.
The November 10, 2015 Cease-And-Desist Letter

49.
On the evening of November 10, 2015, Respondents issued and released to the
public a cease-and-desist letter (Letter) demand[ing] that DraftKings cease and desist from
illegally accepting wagers in New York and asserting that Respondents intend to file suit to
enjoin repeated illegal and deceptive acts and practices, while purporting to provide DraftKings
a five-day period to explain why Respondents should not initiate any proceedings. Letter at 1,
3-4.
50.
The Letter is replete with gross errors and misunderstandings concerning
DraftKings offerings and the laws that govern those offerings, and contains assertions
undermining the very statutory interpretation it advances.
13
51.
The Letter contends, the legality of traditional fantasy sports has never been
seriously questioned in New York, Letter at 2. That is true enough and makes good sense, but
the Letter at the same time incorrectly argues that DFS is illegal. In other words, the Attorney
General is taking the position that if individuals play fantasy sports focused on a particular day or
weekend, it is unlawful gambling, but if they continue to do that for a season, then it somehow
transforms into a legal game of skill. Unable to support its false premise that DFS is gambling,
the Letter focuses instead on what it asserts is a critical distinction between traditional
fantasy sports, whose operators profit primarily from administrative fees and advertising, and
DFS, whose operators are in active and full control of the wagering and profit directly from
it. Letter at 2. Of course, this supposed distinction is both incorrect and completely irrelevant to
the critical issue of whether DFS is a game of skill. The Letter also asserts that, unlike DFS,
traditional fantasy sports lack elements of instant gratification and easy game play; require
a long-term strategy; and are played only for bragging rights or side wagers. Id. Again, this
mischaracterization of DFS has nothing to do with whether DFS is a game of skill, which is the
core question to be determined under New York law.
52.
The Letter further alleges that DraftKings offerings violate the law under the
following theories:
53.
First, the Letter alleges that DraftKings operations constitute illegal gambling
under the definition set forth in New York Penal Law 225.00 for two reasons: (1) because
DraftKings customers place betswhich Respondents contend are styled as feeson an
event not under [their] control or influence, namely, the accomplishments of real-world
athletes; and (2) because winning or losing depends on numerous elements of chance to a
material degree. Letter at 1-3. The Letter states, in conclusory fashion, that the illegality of
14
DFS is clear from any reasonable interpretation of our laws, in particular, the New York State
Constitutionwhich prohibits pool-selling, book-making, or any other kind of gambling
and, the statutory definition of gambling set forth in Penal Law 225.00. Letter at 2-3.
54.
Second, the Letter alleges that, because DraftKings offerings easily qualify as
gambling by its customers, DraftKings has violated several New York criminal laws, including
those prohibiting knowingly . . . profiting from unlawful gambling activity and knowingly
possessing any writing, paper, instrument or article of a kind commonly used in . . . a
bookmaking scheme or enterprise. Letter at 3-4.
55.
Third, the Letter alleges that DraftKings has accordingly misrepresented that it
complies with applicable laws and misrepresented that its games are not considered
gambling. Letter at 4.
56.
Fourth, although the Letter accuses DraftKings of operating games that are
dependent on chance to a material degree, and of misrepresenting the degree of skill

implicated in the games, it also accuses DraftKings of misrepresenting the likelihood that an
ordinary player will win the jackpot because the top one percent of DraftKings winners
receive the vast majority of the winnings. Letter at 1-2, 4.
57.
Fifth, the Letter alleges that DraftKings transact[s] its business in a persistently
fraudulent and illegal manner. Letter at 4.

58.
The Letter also asserts broadly that DraftKings offerings are neither harmless
nor victimless. Letter at 1. Respondents contend in that regard that they have learned from
unnamed health and gambling experts that DFS appears to create the same public health
and economic problems associated with gambling. Id. at 2. The Letter also alleges that
[c]ertain structural aspects of DFS make it especially dangerous to individuals prone to
15
gambling addiction. Id. Those dangerous elements that the Letter views as distinguishing
DFS include a quick rate of play, large jackpots, and a false perception that it is eminently
winnable. Id. The Letter offers no support for these contentions.
59.
Shortly after releasing the Letter to DraftKings, Respondent Schneiderman widely
publicized the allegations in the Letter, and expanded upon them, in interviews with numerous
local and national news outlets (television, radio, and print). In those remarks, Respondent
Schneiderman further erred in equating DraftKings offerings with offerings by the horse track
guys and the casino industry.
F.
The Inconsistencies And Errors In Respondents Letter

60.
Respondents letter is irrational, internally inconsistent, and based on a
fundamental misapprehension of fantasy sports and the governing law. By way of example:
61.
First, the Letter announces that traditional fantasy sports activities are legal, but
that Petitioners DFS offerings are not. In purporting to draw a distinction between those two
categories, Respondents betray their misunderstanding of the games. The notion that DFS
entails no long-term strategy, utterly ignores the reality that selecting a winning lineup is a
complex, skill-infused process involving picking (from within the salary cap) the players that
will outperform others on a host of particularized criteria not directly correlated to an existing
teams winning, or even any single event. Cf. Humphrey v. Viacom, Inc., No. 06 2768 DMC,
2007 WL 1797648, at *2 (D.N.J. June 20, 2007) (The success of a fantasy sports team depends
on the participants skill in selecting players for his or her team, trading players over the course
of the season, adding and dropping players during the course of the season and deciding who
among his or her players will start and which players will be placed on the bench.). In that
regard, DFS calls on very much the same complex strategies employed in season-long fantasy
sports. And these are the skills that sharply distinguish DFS participation from the casino and
16
horse track activities to which Respondents have drawn comparisons in their statements to the
press, explaining why Congress explicitly exempted fantasy sports games from the prohibitions
in UIGEA.
62.
Indeed, DFS is actually more skill-based than traditional season-long fantasy
sports, which the Attorney General acknowledged are skill-based and unquestionably legal.
First, every player in a traditional season-long fantasy sports contest starts off in a different and
unequal position, determined largely by chance according to their position in a competitive
draft. On the other hand, all DFS players start off in the same position, with the ability to draft
any player and facing identical salary and roster constraints. Second, because season-long
fantasy leagues go on for months, there is much more chance and unpredictability resulting from,
for example, the possibility that injury or other aberrant events months down the road can affect
player performance, making it difficult to predict performance over the course of the season.
Additionally, season-long players are limited to playing the same athletes they drafted or picked
up as free agents, even in games where adverse conditions exist. DFS players can select any
athletes they want and can thus factor in a variety of additional considerations into their skillbased lineup, such as quality of opposing defense, weather conditions, expected gameplay, and
many, many more variables.
63.
DFS contests also differ from some season-long games in that DFS operators like
DraftKings pre-announce for each contest the players salaries, salary cap, number of
contestants, and prize pool. As a result, DFS contests involve more skill than typical season-long
games, which do not require fantasy players to attempt to maximize fantasy points subject to the
assigned salaries and cap.
17
64.
While DFS contests require more skill than season-long contests, they are in
many other relevant respects quite similar. Both can involve playing for bragging rights and/or a
significant range of entry fees and prizes. Both types of games are designed to be user-friendly,
encourage recruitment of new players, and involve game play that is easy to understand (though
difficult to master). Operators of both types of contests understand and supervise the types of
games that they offer. And some internet sites, like Yahoo! and CBS, host season-long contests
that, like DraftKings DFS contests, require entry fees and award prizes in amounts similar to
those provided through the DraftKings platform. Like the season-long fantasy sports business
that the Attorney General appears to endorse, DraftKings earns revenues from administrative
fees on pay-to-enter fantasy contests. Furthermore, these similarities are completely unrelated to
the skill or chance determination of the underlying fantasy contests.
65.
Second, the Letter states that the the top one percent of DraftKings winners
receive the vast majority of the winnings. But that factthat, in certain contests, a minority of
experienced, skilled players may win with greater frequencyundermines the Attorney
Generals legal conclusion. Those players win with greater frequency precisely because DFS is
a game of skill that rewards experience, talent, and improvement over time.
66.
Third, in asserting that the relevant legal test in N.Y. Penal Law 225.00(2)
hinges on whether winning or losing depends on numerous elements of chance to a material

degree, Respondents have ignored that courts and commentators have continued to use the
dominating element standard earlier New York judicial opinions applied after the legislature
enacted 225.00 in 1965. See, e.g., People v. Li Ai Hua, 24 Misc. 3d 1142, 1145 (Crim. Ct.
2009) (The test of the character of the game is not whether it contains an element of chance or
an element of skill, but which is the dominating element that determines the result of the
18
game.); Criminal Law in New York 31:4 (4th ed. 2014) (Some games involve both an
element of skill and chance. To determine if the game is one of chance, the court will look at the
dominating element that determines the result of the game. (quotation marks omitted)); 62 N.Y.
Jur. 2d Gambling 3 (2015) (The test of the character of a game is not whether it contains an
element of chance or an element of skill, but which is the dominating element that determines the
results of the game.). Thus, the critical question is whether the element of chance predominates
over the element of skill in DFS. It does not.
67.
Had the Attorney General provided DraftKings an opportunity to discuss the
legality of DFS under New York law, DraftKings would have offered these and other arguments
and evidence. The Attorney General chose not to do so, despite DraftKings ongoing
cooperation and repeated requests for continued communication.
G.
Immediate And Irreparable Harm To Petitioner, Its Customers, And Employees

68.
The harm threatened by Respondents to DraftKings customers, employees,
operations, finances, and reputation is extraordinary and self-evident.

69.
Those harms include the immediate ban of hundreds of thousands of New Yorkers
from the DFS marketplace, as well as a chilling effect on DraftKings business nationwide, its
relationship with existing investors and partners, and its ability to attract new investors and
partners.
70.
Moreover, even during the five-day notice period provided by the letter and by
statute, Respondents are coercing, through press statements and private conversations,
DraftKings vendors and business partners into ceasing business relations or providing services
to DraftKings in New York.
19
STATEMENT OF THE CLAIMS

FIRST CAUSE OF ACTION
AGENCY ACTION INVALID AS ARBITRARY AND CAPRICIOUS AND IN EXCESS
OF JURISDICTION: C.P.L.R. 7803
71.
DraftKings re-alleges and incorporates by reference the allegations of all
paragraphs above as if fully set forth herein.

72.
By engaging in this conduct, Respondents have violated, and unless enjoined will
continue to violate, Article 78 of the New York Civil Practice Law and Rules (CPLR).
Among other grave legal errors, the Letter is agency action unauthorized by New York law,
because, among other reasons, Respondent Schneiderman does not have statutory authority to
issue cease-and-desist orders. The Letter is further in conflict with New York law, including the
very provisions Respondents have purported to interpret and seek to enforce.
SECOND CAUSE OF ACTION
DECLARATORY AND INJUNCTIVE RELIEF
73.

74.
Each and every one of the grave legal errors described herein independently
warrants declaratory and injunctive relief in favor of Petitioner, including, but not limited to, the
grounds that the Letter is agency action unauthorized by New York law, including because
Respondent Schneiderman does not have statutory authority to issue cease-and-desist orders, and
is further in conflict with New York law, including the very provisions Respondents have
purported to interpret and seek to enforce.
20
THIRD CAUSE OF ACTION

DENIAL OF DUE PROCESS: FIFTH AND FOURTEENTH AMENDMENTS OF THE
UNITED STATES CONSTITUTION AND 42 U.S.C. 1983
75.

76.
continue to violate, DraftKings rights under the Due Process Clauses of the Fifth and Fourteenth
Amendments of the United States Constitution, as made enforceable through 42 U.S.C. 1983.
FOURTH CAUSE OF ACTION
DENIAL OF DUE PROCESS: ARTICLE I, SECTION 6 OF NEW YORK
CONSTITUTION
77.

78.
continue to violate, DraftKings rights under the Due Process Clause of Article I, Section 6 of the
New York Constitution.
FIFTH CAUSE OF ACTION
SEPARATION OF POWERS: ARTICLE III, SECTION 1; ARTICLE IV, SECTION 1;
ARTICLE VI, SECTION 1 OF NEW YORK CONSTITUTION
79.

80.
continue to violate, DraftKings rights under the separation-of-powers provisions of the New
York Constitution, namely Section 1 of Articles III, IV, and VI.
21
SIXTH CAUSE OF ACTION

DENIAL OF EQUAL PROTECTION: FOURTEENTH AMENDMENT OF THE
81.

82.
continue to violate, DraftKings rights under the Equal Protection Clause of the United States
Constitution, as made enforceable through 42 U.S.C. 1983.
SEVENTH CAUSE OF ACTION
DENIAL OF EQUAL PROTECTION: ARTICLE I, SECTION 11 OF NEW YORK
CONSTITUTION
83.

84.
continue to violate, DraftKings rights under the Equal Protection Clause of Article 1, Section 11
of the New York Constitution.
EIGHTH CAUSE OF ACTION
UNCOMPENSATED TAKINGS: FIFTH AND FOURTEENTH AMENDMENTS OF THE
85.

86.
continue to violate, DraftKings rights under the Takings Clause of the Fifth Amendment of the
United States Constitution, as made enforceable through 42 U.S.C. 1983.
22
NINTH CAUSE OF ACTION

UNCOMPENSATED TAKINGS: ARTICLE I, SECTION 7 OF NEW YORK
CONSTITUTION
87.

88.
continue to violate, DraftKings rights under the Takings Clause of Article I, Section 7 of the
New York Constitution.
TENTH CAUSE OF ACTION
TORTIOUS INTERFERENCE WITH CONTRACT
89.

90.
At all relevant times, DraftKings was a party to separate payment processing
contracts with Vantiv, Inc. (Vantiv) and PayPal Holdings, Inc. (PayPal). At all relevant
times, DraftKings has fulfilled its contractual obligations to Vantiv and PayPal.
91.
Respondents knew about DraftKings contracts with Vantiv and PayPal. With
knowledge of these contracts, Respondents contacted Vantiv, PayPal, and other third parties
providing services to DraftKings, in an intentional effort to procure these third parties breach of
their contractual obligations to DraftKings. On information and belief, on November 11 and 12,
2015, Respondents contacted Vantiv and instructed the company to immediately stop
processing payments from DraftKings New York customers, threatening them with legal action.
On information or belief, on or about November 12, 2015, Respondents similarly contacted
PayPal and informed the company that it would be violating the law if it continued to process
DraftKings payments from New York customers.
23
92.
Because of Respondents actions, Vantiv informed DraftKings that it would
imminently stop processing payments for DraftKings New York players as a result of the
Attorney Generals cease-and-desist letter and outreach. In ceasing to process payments under
its contract with DraftKings, Vantiv would be breaching its contract with DraftKings. Absent
the outreach from Respondents on November 11 and 12, Vantiv would not breach its agreement
with DraftKings.
93.
As a direct result of Respondents misconduct, DraftKings has suffered and will
continue to suffer irreparable harm to its ability to operate its business in New York and
elsewhere. DraftKings thus has no adequate remedy at law.
ELEVENTH CAUSE OF ACTION
TORTIOUS INTERFERENCE WITH PROSPECTIVE BUSINESS RELATIONS
94.

95.
DraftKings developed with both Vantiv and PayPal a lucrative, productive, and
mutually beneficial business relationship of processing payments from DraftKings customers.

DraftKings reasonably expected that its business relationships with Vantiv and PayPal, and the
work put in to foster these relationships, would ripen into continued contractual relations.
96.
Respondents unquestionably knew about DraftKings business relationships with
Vantiv and PayPal.

97.
Respondents intentionally interfered with DraftKings business relationships with
Vantiv and PayPal, and used dishonest, unfair, and improper means to do so. Among other
things, Respondents made explicit or implied threats of legal action, including potential criminal
prosecution, to Vantiv and PayPal. The purpose of these threats was to interfere with
24
DraftKings prospective business relations with Vantiv and PayPal and to shut down DraftKings
business in New York State.
98.
As a direct result of Respondents misconduct, DraftKings has suffered and will
continue to suffer irreparable harm to its ability to operate its business. DraftKings has no
adequate remedy at law.
JURY DEMAND
99.
DraftKings demands a trial by jury in this action on each of its claims.

DRAFTKINGS IS ENTITLED TO DISCOVERY
100.
DraftKings will seek expedited discovery, by order to show cause, into the record
on which Respondents cease-and-desist letter purports to be based. Such discovery is warranted

to provide DraftKings with information exposing that letter as the product of a predetermined
policy preference rather than law and available evidence.
NOTICE OF NEW YORK CLAIMS UNDER N.Y. GML 50
101.
This action has been commenced within one year and ninety days of the date of
the occurrence of the events giving rise to this Complaint.

NO PRIOR APPLICATION
102.
No prior application for this or any similar relief has been made in this Court.
PRAYER FOR RELIEF
103.
DraftKings respectfully requests that the Court issue a declaration, on an
expedited basis, pursuant to CPLR 3001, 6301-13, and 42 U.S.C. 1983 and 1988:
a.
Declaring that DraftKings DFS contests do not constitute gambling
within the meaning of New York law, including Article I, 9, of the Constitution and
Sections 225.00, 225.05, 225.10, 225.15, and 225.20 of the Penal Law, and do not
25
constitute bookmaking within the meaning of New York law, including Article I, 9,
of the Constitution and Section 225.00 of the Penal Law;
b.
Declaring that DraftKings statements and advertisements identified above
and in the Notice do not constitute a deceptive business practice in violation of GBL
349 or false advertising in violation of GBL 350; and
c.
Declaring that DraftKings operation of DFS contests therefore does not
constitute fraud or persistent illegality that may be the subject of an injunction or other
civil remedies under Executive Law 63(12) or BCL 1303.
104.
DraftKings further requests an injunction against the Attorney Generals taking
any enforcement actions inconsistent with the Courts declaratory judgment requested above, and
an order mandating that the Attorney General cease and desist threatening adverse action against
DraftKings vendors, partners and financial institutions, and requiring the Attorney General to
inform those vendors, partners and financial institutions already contacted about this order.
105.
DraftKings further requests the award of its costs of this action, including
attorneys fees to the extent authorized by law.

106.
DraftKings also seeks such other, further and different relief as the Court
determines to be just and proper, including relief further or consequential to DraftKings request
for declaratory relief to the extent set forth above.
26
Dated: New York, New York

November 12, 2015
Respectfully submitted,
GIBSON,DUNN & CRUTCHER LLP
By:
/~ ~~-S
Randy M. astro
Alexander H. Southwell
Avi Weitzman
Matthew J. Benjamin
200 Park Avenue,47th Floor

New York, New York 10166-0193
Telephone: (212)351-4000
(212)351-4035
Facsimile:
Attorneysfor DraftKings, Inc.
27
VERIFICATION
STATE OF NEW YORK

COUNTY OF NEW YORK
Jason Robins, being duly sworn, deposes and says:

1.
I am the Chief Executive Officer of DraftKings, Inc., Petitioner and Plaintiff in
this consolidated Article 78 proceeding and plenary action.

2.
I have read the foregoing petition and foregoing complaint, and can state that the
factual contents thereof are true based upon my personal knowledge, except as to matters alleged
upon information and belief, which matters I believe to be true based on my review of pertinent
documents and conversations with persons with persor~"~~~-.,,~a~-~
Sworn to before me on this

12t~' day of November 2015
o~cir HaRR~s
Merry Public,State of New York
No.02HA6255842
Qualified In New York County
~Qrflrl~iSSMan Ettptres February 13,20~
INDEX NO. 161691/2015

NYSCEF DOC. NO. 3

COUNTY OF NEW YORK
------------------------------------x
:
FANDUEL INC.,
:
:
:
Plaintiff,
:
:
- against :
:
ERIC T. SCHNEIDERMAN, in his official capacity
as Attorney General of the State of New York, and the :
:
STATE OF NEW YORK,
:
:
Defendants.
-------------------------------------
Index No. ___________/2015

NYSCEF Case
COMPLAINT FOR
DECLARATORY AND
INJUNCTIVE RELIEF
Plaintiff FanDuel Inc. (FanDuel), by its undersigned attorneys, for its

Complaint against Defendant Eric T. Schneiderman, in his official capacity as Attorney
General of the State of New York (the NYAG), and Defendant the State of New York,
alleges as follows:
1.
This is an action seeking a declaratory judgment and injunctive relief to
prevent the NYAG from pursuing further efforts to shut down FanDuels enormously
popular fantasy sports activities in New York state. Such a shutdown would deprive
hundreds of thousands of subscribing New Yorkers of the opportunity to pit their skills
against the skills of others in selecting a fantasy team of athletes from different sports
teams and competing in contests offering prizes to the players whose fantasy teams
perform best. The NYAG, in a November 10, 2015 cease and desist letter that the
NYAG disseminated to the press, has taken the legally incorrect position that the
presence of prize money in these contests transforms FanDuels activities into illegal
sponsorship of gambling, and that FanDuels advertisements have been false and
misleading. FanDuel is entitled to a declaration that its conduct is legal and an injunction
against enforcement efforts based on claims of illegality by the NYAG, so that FanDuels
New York business is not destroyed as a result of the NYAGs claims.
2.
FanDuel is a leading provider of daily fantasy sports (DFS) contests.
Like the traditional fantasy sports contests that millions of Americans have enjoyed for
decades, DFS contests allow sports fans to compete against each other by selecting
athletes for their fantasy team and then earning points based on the statistical
performance of their chosen athletes in major sporting events. Participants pay an entry
fee into contests and, depending on their selected athletes performance relative to the
performance of other participants selected athletes, win pre-announced prizes. These
fantasy contests have made sports more fun for many fans, providing them a forum for
pitting their skills in selecting a team against those of other sports fans.
3.
FanDuels DFS contests differ from traditional fantasy sports contests in
two primary ways. First, they are shorter. Traditional fantasy sports contests ordinarily
last an entire season, but DFS contests typically begin and end in a single day (for
baseball, basketball and hockey), or a week (for football). Second, FanDuels DFS
contests use a different method for selecting players. In FanDuel fantasy contests,
participants select a group of players as to each of whom FanDuel has assigned a fantasy
value, subject to the competitive discipline that the collective value of all players in
each participants roster cannot exceed a cap, whereas in traditional fantasy sports
contests competitors most commonly choose their team through a draft in which they
take turns selecting athletes for their roster. Both of these forms of player selection are
designed to simulate the rigors and challenges of roster selection experienced by actual
general managers of teams.
4.
FanDuels contests have become enormously popular. Launched in 2009,
FanDuel now has millions of users and offers a variety of contest formats, all of which
are expressly compliant with federal law that specifies the types of fantasy sports contests
that do not constitute a bet or wager.
5.
On November 10, 2015, the Office of the NYAG sent FanDuel a letter
titled Notice to Cease and Desist and Notice of Proposed Litigation Pursuant to New
York Executive Law 63(12) and General Business Law 349 (the Notice). The
Notice demands that FanDuel cease and desist from offering its DFS contests to residents
of New York State, declaring that after a review, the NYAG has determined that
FanDuels contests constitute illegal gambling under New York law. (Notice at 1.) The
notice states that unless FanDuel ceases offering its contests to New York residents, it
intends to bring a civil enforcement action against FanDuel under Executive Law
63(12) seeking injunctive relief from a court. (Id. at 3.) The Notice also states that the
NYAG intends to bring a civil action against FanDuel seeking an injunction against
certain of FanDuels advertisements under General Business Law (GBL) 349 and
350 and Executive Law 63(12), alleging that they are misleading to consumers. (Id.)
6.
The NYAG released a copy of the Notice to the media, and it has
contacted current and potential FanDuel customers, service providers, investors and other
members of the public to make those entities aware of the NYAGs allegations. On
information and belief, the NYAG directly contacted FanDuels payment processors,
pressuring them outside the judicial process to cease providing service to FanDuel unless
FanDuel immediately suspends business in the New York market. These actions were
intended to immediately disrupt FanDuels New York business adversely, and they have
done so.
7.
FanDuel has been consistently operating in New York since 2009, and its
contests are enjoyed by hundreds of thousands of New York residents. FanDuel therefore
has an urgent need for a judgment resolving the legality of its contests under New York
law, which FanDuel submits are games of skill and are legal under the relevant statutes.
8.
Accordingly, Plaintiff seeks a declaration that its DFS contests do not
constitute illegal gambling or bookmaking under New York law, and an injunction
prohibiting the NYAG from pursuing enforcement actions based on its different view.
9.
FanDuel also seeks a declaration that its advertising does not contain false
statements of fact and is not misleading under New York law, plus injunctive relief
against enforcement, as the NYAGs position on that point also rests on an error of law.
THE PARTIES
10.
Plaintiff FanDuel Inc. is a Delaware corporation duly authorized to do
business in the State of New York. Its principal place of business is in New York, New
York.
11.
FanDuel is one of the worlds largest DFS providers, with over five
million registered users, including over 250,000 registered users in New York. FanDuel
offers DFS contests for all the major team sports, including for the National Football
League (NFL), Major League Baseball (MLB), the National Basketball Association
(NBA), the National Hockey League (NHL), NCAA Division I Mens College
Football (NCAAF), and NCAA Division I Mens College Basketball (NCAAB).
12.
Defendant Eric T. Schneiderman is the Attorney General of New York
State and is sued in his official capacity.

13.
The State of New York also is a defendant in this action.

JURISDICTION AND VENUE
14.
This action for a declaratory judgment and an injunction is within this
Courts general original jurisdiction and not with the jurisdiction of any court of limited
jurisdiction of this state.
15.
This Court has personal jurisdiction over Defendants.
16.
Venue in New York County is proper under CPLR 503 because Plaintiff
FanDuel Inc.s principal offices are located in this county.

FACTUAL AND LEGAL BACKGROUND
FanDuels DFS Contests
17.
FanDuels DFS contests allow participants to select real athletes in a given
sport who make up their fantasy lineup or roster. Participants then accumulate points
based on the statistical performance of the athletes they selected in real-world sporting
events. Unlike traditional fantasy sports, which play out over the course of an entire
season, DFS offers participants new contests on a daily (or in the case of the NFL,
weekly) basis. DFS participants are given a fictional salary cap within which to select a
team for that days games. FanDuel assigns a price or value to each player in advance, so
that participants experience the discipline of selecting non-stars as well as stars for their
rosters to fit within the cap, and must assess not only players absolute value but also
their value per fictional unit of price attached to them. When the last game ends for a
particular day or week, the contest is over, and prizes are awarded based on a schedule
announced to participants before they entered the contest.
18.
FanDuel offers a number of different contest formats. These include
tournaments, which can have thousands of entries; leagues, which are still only one-day
or one-week contests but include between 2 and 99 participants; multiplier contests, in
which all participants who finish in the top 50% or top 30% of contestants will win the
same amount; and head-to-head contests, in which two participants compete against one
another directly.
19.
For each type of contest, FanDuels prizes are made known to participants
before the contest begins, and the prize values do not change based on the number of
entries in the announced contest. For the larger contests like tournaments, FanDuel sets a
maximum number of participants vying for pre-announced prizes. Some contests limit
the number of entries a participant can submit; others allow participants to submit
multiple entries in a single contest.
20.
With this innovative format and the offering of fantasy sports without a
season-long commitment, FanDuel has grown rapidly in recent years, with over one
million people entering FanDuel contests in 2014.
Statutory Framework
21.
The Notice states that the NYAG intends to bring a civil action for an
injunction under 63(12) of the New York Executive Law, which authorizes the NYAG
to bring a civil action to enjoin repeated fraudulent or illegal acts or persistent fraud or
illegality in the carrying on, conducting or transaction of business in New York.
(Notice at 3.) The Notice also references Business Corporation Law (BCL) 1303,
which, when read in conjunction with BCL 1101, similarly authorizes the NYAG to
bring a civil action to enjoin a non-New York corporation from carrying on, conducting
or transacting business in a persistently fraudulent or illegal manner in this state.
22.
As a predicate for the NYAGs threatened claims for injunctive relief
under Executive Law 63(12), the NYAGs Notice alleges that DFS constitutes illegal
gambling or bookmaking in violation of various provisions of New York law,
including Constitution Article I, 9, and Penal Law 225.05, 225.10, 225.15 and
225.20. (Notice at 2-3.) Those provisions do not apply to FanDuels business. Among
other reasons, FanDuels DFS contests do not meet the definition of gambling under
New York law because they are games of skill, not chance, and because entry fees to
participate in DFS contests are not bets or wagers. FanDuels business does not
constitute bookmaking under New York law because the underlying DFS contests are
not gambling and because FanDuel does not stand to profit based on the result of those
contests (or have any economic interest in one outcome over another, as a bookmaker or
casino would).
23.
The NYAGs Notice also relies on GBL 349, which authorizes the
NYAG to bring a civil action to enjoin [d]eceptive acts or practices in the conduct of
any business, trade or commerce, and on GBL 350, which authorizes the NYAG to
bring a civil action to enjoin false advertising. The Notice relies on those statutes both
as independent causes of action for injunctive relief and as a predicate for seeking
injunctive relief under Executive Law 63(12). Contrary to the Notices assertions,
FanDuels advertising is truthful, accurate and not misleading, and the terms of each of
its contests including the amount of the entry fee, the maximum number of participants,
and the schedule of prizes are clearly and accurately disclosed to all contest participants
before they enter contests.
FanDuels DFS Contests Are Games of Skill, Which, Like Traditional Fantasy
Sports Contests, Have Been Expressly Authorized By Federal Law
24.
FanDuels contests are games of skill and therefore do not constitute
illegal gambling under New York law. As investors make selections for their portfolios,
FanDuel participants base their DFS player selections on historical performance,
statistics, research and trends. These selections can include a multitude of strategic
factors, including the venue for a contest, a players or teams matchup against a
particular opponent, days of rest between games, how a players performance may
correlate (or not) with other players on his team, and predictions about how other DFS
players are likely to make selections. Indeed, in making roster selections for FanDuels
DFS contests, participants consider a wealth of current information relevant to athletes

expected performance that is not available at the beginning of any season.
25.
Given the deep sports knowledge and strategic thinking required in these
contests, it is natural and expected that more skilled and experienced players will win
more often. Thus, although the NYAGs allegation in the Notice that the top one
percent of FanDuels winners receive the vast majority of the winnings is factually
incorrect in its particulars, as a general matter it is true that the most highly skilled
players win a higher percentage of the prizes. (Notice at 2.) That simply reflects that
DFS is primarily a game of skill and does not depend on a material or dominating
element of chance.
26.
Congress has expressly recognized that fantasy sports contests, such as
those offered by FanDuel, are games of skill and that participation in any fantasy or
simulation sports game does not constitute a bet or wager. 31 U.S.C.
5362(1)(E)(ix). In doing so, Congress recognized that, because winning outcomes in
fantasy sports contests reflect the relative knowledge and skill of the participants and are
determined predominantly by accumulated statistical results of the performance of
individuals (athletes in the case of sports events) in multiple real-world sporting or other
events, entries in such contests do not constitute bets or wagers. Id.
27.
In compliance with this federal law, all of FanDuels contests ensure that
(1) no fantasy or simulation team is based on the current membership of a real amateur or
professional sports team; (2) no winning result is based on the score, point spread, or any
performance or performances of any single real world team or any combination of such
teams; (3) no winning result is based solely on any single performance of an individual
athlete in any single real world sporting or other event; and (4) prizes and awards are
established and made known to participants before the game or contest and their value is
not determined by the number of participants or amount of fees paid. See id. These
requirements help protect the integrity of individual sporting events.
28.
Consistent with this federal law and with years of historical practice, the
NYAGs Notice explicitly concedes that season-long fantasy sports are not gambling,
noting that the legality of these contests has never been seriously questioned in New
York. (Notice at 2.) In the same letter, however, the NYAG attempts to draw a critical
distinction between FanDuels DFS contests and traditional fantasy sports by noting that
FanDuels customers are clearly placing bets on events outside of their control or
influence, specifically on the real-game performance of professional athletes. (Id. at
1-2.) However, under the NYAGs theory, any fantasy contest of any duration in which
entry fees and a prize are awarded would meet the definition of gamblinga premise he
himself dismisses as clearly wrong. FanDuels arranging for contests to run over a
shorter period of time, and its administration of part of the process for selecting rosters by
assigning player values and applying a salary cap instead of administering a draft, does
not distinguish FanDuels contests in any factually or legally meaningful sense from the
traditional fantasy contests that the Notice acknowledges are entirely legal.
29.
There is equally no merit to the NYAGs claim that FanDuels DFS
contests constitute illegal gambling because they are designed for instant gratification,
stressing easy game play and no long-term strategy. (Id. at 2.) DFSs practice of
10
offering more frequent individual contests (and hence more prizes) than traditional
fantasy sports has no bearing on the relative role of skill and chance. The ease with
which a participant can compete is similarly irrelevant to an analysis of whether DFS
constitutes illegal gambling; FanDuels improvement on traditional fantasy sports
contests by making them more user-friendly does not make them illegal. In many
respects, the short duration of FanDuels contests allows for a greater exercise of skill,
and involves less chance, than contests that play out over a full season, because the
participant has more available information (from team and player matchups to injury
status and weather) into the factors that may affect the performance of the rostered player
in particular games. By contrast, in season-long fantasy, similar information is
unavailable at the time of player selection.
30.
FanDuel has attracted over five million users because the participants
enjoy the games and find the establishment of a fantasy roster and the competition with
others over rosters performance a mechanism for expanding the number of games they
follow and enhancing their enjoyment of sports. The overwhelming majority of people
who participate in DFS are dedicated sports fans who recognize the commitment to
knowledge-gathering and making judgments about player capability that is necessary to
enhance prospects of winning the contests they enter.
Advertising
31.
The NYAGs Notice further demands that FanDuel cease and desist
[m]isrepresenting that FanDuel complies with applicable laws . . . and misrepresenting

that FanDuels Games are not considered gambling, in violation of Executive Law
11
63(12) and GBL 349 and 350. (Notice at 4.) As stated above, the DFS games
operated by FanDuel are compliant with applicable laws and are not gambling, and
FanDuel seeks a declaration in this action confirming as much. To the extent that
FanDuel has made any statements to that effect, they are true, accurate and not
misleading.
32.
The NYAG also accuses FanDuel of misrepresenting the likelihood that
an ordinary player will win a jackpot and misrepresenting the degree of skill implicated
in the games. (Id.) In appearing to fault FanDuels advertisements for failing
adequately to disclose to novice players just how much skill is involved in the games, the
NYAG appears to be advancing a position directly at odds with the NYAGs assertion
that the contests are games of chance. The NYAG does not and cannot identify any
FanDuel advertising that would tend to mislead customers into thinking that skill plays
little part in the outcome of FanDuels DFS contests.
33.
The few specific examples of assertedly misleading advertising presented
in the Notice do not support the NYAGs claims. The Notice identifies only two
allegedly false and misleading statements: that anybody can play, anybody can
succeed; and Play for real money with immediate cash payouts . . . the money is real!
(Id. at 2.) Each of these statements is true, accurate and in no way misleading.
34.
FanDuel presents numerous opportunities for players of all skill levels to
win prizes in differing DFS contests, including (a) 50/50 multiplier contests in which the
top half of the participants all win the same prize; (b) league contests played among small
groups of self-selected individuals such as friends or colleagues, the top few of whom
12
win a prize; and (c) head-to-head games in which two individuals play against each other.
Tournament contests, which typically involve many players and large prizes, are also a
popular offering, but the site fully discloses the maximum number of participants and the
full schedule of prizes to all entrants in advance of the contest, such that any reasonable
player would recognize that his or her chances of winning are small.
FIRST CAUSE OF ACTION
(Declaratory Judgment That FanDuels DFS Contests Are Not
Gambling or Bookmaking and Injunction Against Enforcement)
35.
Plaintiff restates paragraphs 1 to 34 as if fully set forth here.
36.
FanDuel is entitled to a declaratory judgment that its DFS contests do not
violate any applicable provision of New York law, FanDuels DFS contests do not
constitute persistent illegality that would authorize the Attorney General to bring a civil
action against FanDuel under Executive Law 63(12) or BCL 1303.
37.
In particular, FanDuel is entitled to a declaratory judgment that its DFS
contests do not constitute unlawful gambling or bookmaking under any provision of

law applicable in New York, including Article I, 9 of the New York Constitution or
225.00, 225.05, 225.10, 225.15, and 225.20 of the Penal Law.
38.
The NYAGs incorrect public allegations that FanDuels business of
offering DFS to participants is illegal, combined with communications by the NYAG to

the press, enterprises that process cash movements, investors and others having business
dealings with FanDuel, are causing immediate and continuing harm to FanDuel by
13
damaging FanDuels reputation with consumers, service providers and the public and by
impeding FanDuels ability to operate its legitimate business.
39.
This case presents a present, ripe and justiciable controversy as to the
rights and other legal relations of the parties. Because of the NYAGs issuance of the
Notice and other efforts, FanDuel now has an urgent need to resolve the legality of its
operations in New York and the validity of its public statements in New York before this
Court.
40.
FanDuel has incurred and will continue to incur irreparable harm because
of the NYAGs actions and has no adequate remedies other than a prompt declaratory
judgment coupled with an injunction against Defendants pursuit of enforcement actions
inconsistent with that declaratory judgment.
41.
Declaratory and injunctive relief is appropriate to resolve whether DFS, as
operated by FanDuel, complies with New York law.

SECOND CAUSE OF ACTION
(Declaratory Judgment That FanDuels Advertisements Are
Not Misleading and Injunction Against Enforcement)
42.
Plaintiff restates paragraphs 1 to 41 as if fully set forth here.
43.
FanDuel is entitled to a declaratory judgment that each of its
advertisements and statements referenced in the NYAGs letter is true, accurate, not
misleading, and in full compliance with all applicable requirements of law, including
GBL 349 and 350.
14
44.
The NYAGs incorrect public allegations that FanDuels advertisements
mislead the public are causing immediate and continuing harm to FanDuel by damaging
FanDuels reputation with consumers, service providers and the public and by impeding
FanDuels ability to operate its legitimate business.
45.
This case presents a present, ripe and justiciable controversy as to the
rights and other legal relations of the parties.

46.
FanDuel has incurred and will continue to incur irreparable harm because
of the NYAGs actions and has no adequate remedies other than a prompt declaratory
judgment coupled with an injunction against Defendants pursuit of enforcement actions
inconsistent with that declaratory judgment.
47.
Declaratory and injunctive relief is appropriate to resolve whether
FanDuels advertisements are true, accurate, not misleading and otherwise in compliance
with applicable New York law.
REQUEST FOR RELIEF
48.
Plaintiff respectfully requests that the Court, on an expedited basis, issue a
declaration in favor of Plaintiffs and against Defendants pursuant to CPLR 3001 that:
a.
FanDuels DFS contests do not constitute gambling within the

meaning of New York law, including Article I, 9, of the
Constitution and Sections 225.05, 225.10, 225.15, and 225.20 of
the Penal Law, and do not constitute bookmaking within the
15
meaning of New York law, including Article I, 9, of the

Constitution and Section 225.00 of the Penal Law;
b.
FanDuels statements and advertisements identified above and in

the Notice do not constitute a deceptive business practice in
violation of GBL 349 or false advertising in violation of GBL
350; and
c.
FanDuels operation of DFS contests therefore does not constitute

fraud or persistent illegality that may be the subject of an
injunction or other civil remedies under Executive Law 63(12) or
GBL 1303.
49.
Plaintiff further requests an injunction against the Defendants taking any
enforcement actions inconsistent with the Courts declaratory judgment requested above.
50.
Plaintiff further requests the award of its costs of this action, including
attorneys fees to the extent authorized by law.

51.
Plaintiff also seeks such other, further and different relief as the Court
determines to be just and proper, including relief further or consequential to Plaintiffs

request for declaratory relief to the extent set forth above.
Dated: New York, New York

November 13, 2015
Respectfully submitted,
/s/ John S. Kiernan

John S. Kiernan
DEBEVOISE & PLIMPTON LLP
919 Third Avenue
16
New York, NY 10022

Phone: (212) 909-6000
Of Counsel:
Marc Zwillinger*
ZWILLGEN PLLC
1900 M Street NW, Suite 250
Washington, DC 20036
*Not admitted in New York
Matthew E. Fishbein
Eric R. Dinallo
Carl J. Micarelli
W. David Sarratt
Attorneys for Plaintiff FanDuel Inc.
17
ForFILED:
Addicts, Fantasy
SitesYORK
Can LeadCOUNTY
to Ruinous Path
- The New11/23/2015
York Times http://www.nytimes.com/2015/11/23/sports/fantasy-sports-addiction-gam...
INDEX NO. 453054/2015
NEW
CLERK
11:49 PM
NYSCEF DOC. NO. 83
1 of 4
http://nyti.ms/1YoyR7b
SPORTS
WIRED FOR PROFIT
By WALT BOGDANICH and JACQUELINE WILLIAMS
NOV. 22, 2015
AUBURN, Ala. A giant cardboard picture, tattered by time, rests against a wall in Joshua Adamss home. It shows a radiant
young woman with an Auburn University corsage hugging the universitys mascot, a tiger. She is Auburns homecoming queen
and Mr. Adamss mother.
The university dominates this city of 60,000, with football its spiritual center. And as Mr. Adams will attest, sports
competition extends beyond the field. Betting for me started when I was 13 years old, he said, adding that bookies were never
hard to find.
Years later, Mr. Adams relished joining his college pals in Atlanta, where they would throw a modest sum of money into a
pot and select their fantasy football teams for a season-long competition. It was one of the most fun days of the year, he said.
People were getting married and having kids, and this was the one time we would all come together.
By then, Mr. Adams knew he had a gambling problem, but games with a single payout after the season did not seem to
him like gambling. It was very different, though, when the action became daily, offering quick payouts, hundreds of bets each
day and six-figure cash prizes. Mr. Adams called it a game changer and counselors say they are seeing people like Mr.
Adams and are expecting many more.
It would be akin to an alcoholic finding out about a whole new street of bars that he never knew about exciting, great
bars, he said. For an addict, it wasnt what I needed. Mr. Adams said he had lost $20,000 in daily fantasy games and tens of
thousands more in illegal sports bets. His life, consumed by gambling, disintegrated to where he considered suicide.
Mr. Adamss story, and others like it, have been largely absent from the cacophony of voices debating whether fantasy
sports an unregulated multibillion-dollar industry financed by media companies, hedge funds and professional sports
organizations constitutes gambling.
The fantasy companies say their daily games are not gambling, contending that the games involve more skill than luck.
Our product is all about entertainment value, said Matt King, chief financial officer of FanDuel, one of the largest daily
fantasy sports providers.
Increasingly, that view is coming under attack, notably by New Yorks attorney general, Eric T. Schneiderman. Two weeks
ago, Mr. Schneiderman ordered FanDuel and its major competitor, DraftKings, to stop accepting bets from New Yorkers
because their games constituted illegal gambling under state law. Both companies are contesting that order in court.
For people like Mr. Adams, now in his mid-30s, this battle is about more than just the letter of the law. In the unregulated
world of fantasy sports, it is also about the absence of safeguards to protect problem gamblers and younger adults.
Absolutely it is gambling, said Mr. Adams, who holds a masters degree in rural sociology and considers himself a child
of privilege. I wish I never would have gotten back into playing fantasy sports, because for me, and I think for compulsive
11/23/2015 4:40 PM
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2 of 4
gamblers, it leads us right back into a destructive state.

Fantasy games appeal to the demographic most likely to develop gambling problems young men, who researchers say
are more prone to taking risks. FanDuel readily admits that it targets millennials.
Fantasy contests have become so popular, and their advertisements so ubiquitous, that gambling counselors say young
children are now playing with their fathers or, in some cases, by themselves. Neva Pryor, who counsels gamblers in New
Jersey, said that at a recent conference, teachers were saying that on Monday mornings, all the students talk about is fantasy
sports.
Most people can play daily fantasy or casino games without a problem. I know there are people that can do it normally,
Mr. Adams said, but he is not one of them. He also acknowledges that he ultimately bears responsibility for his addiction.
Yet gambling counselors say they could more easily help people like Mr. Adams if fantasy companies did not portray their
games as involving mostly skill. That alone is a risk for addiction, said Keith Whyte, executive director of the National Council
on Problem Gambling.
The perception of skill has led many, many people down a very dark path, he said.
Seeking Help
The difference between regulated and unregulated betting is evident in the websites of casinos and fantasy companies.
Because online betting is legal in New Jersey, the Borgata casino can offer Pick the Pros, where players must select
winning football teams for a shot at $200,000. Borgatas home page includes the note, Gambling Problem? Call 1-800GAMBLER. That number connects to a help hotline.
With problem gamblers, the Borgata said, We believe it is our responsibility to offer information and assistance.
In contrast, fantasy players may bet thousands of dollars a day, yet neither FanDuel nor DraftKings mentions 1-800GAMBLER on its website. We have consistently urged them to list our help line and website, Mr. Whyte said. Mr. Adams said
his first step toward breaking his addiction had occurred when he saw the 1-800 number but it was not on a fantasy sports
site.
In the wake of the New York attorney generals legal challenge, DraftKings changed its website a week ago to warn that
playing fantasy sports could be a stress-inducer. But the word gambling does not appear, nor does the help line. Instead,
the company refers players to the National Center for Responsible Gaming, a research group funded in part by the casino
industry.
That group is not a consumer protection advocate, Mr. Whyte said. They do good research and are a fine group, but
they dont provide direct services to problem gamblers like we do.
FanDuel said in a statement: In any nascent, disruptive industry, important questions are often raised about how the
industry should operate. Fantasy sports is no different, and we are reviewing our policies and practices to ensure consumers
have a positive experience on our site. The company said it already had a process by which players could opt out of games.
DraftKings issued a statement saying we are continuously optimizing our site to ensure our product is best in class and
this includes consumer protections.
Players who bet excessively are usually the last to recognize it, underscoring the need, counselors say, for fantasy sites to
list warning signs, such as lying about time or money lost to betting.
Mr. Adams said he routinely lied to get money for example, telling his parents he needed a new roof. I dont know how
many roofs Ive put on my house, he said.
11/23/2015 4:40 PM
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Problem gamblers also deceive themselves, believing their luck will turn.
Whats interesting about daily fantasy, the way the marketing works, is that you have new winners every day or every
weekend, said Daniel Trolaro, who educates people on compulsive gambling. So for the problem gambler who thinks that he
or she is simply one bet away from winning back and solving their problems, they have ample opportunity on a daily basis to
do that.
Even gamblers who have decided to stop playing fantasy sports have trouble breaking away.
Jennifer Alfert, a certified gambling counselor in Boca Raton, Fla., said a client who had quit gambling confided that, in
September, DraftKings had offered to let him play for free if he signed up a friend which he did, and he won $35.
Rather than wait for a relapse, Ms. Alfert said, I opted to intervene. So in October, she said, she asked her client, whom
she identified only by his first name, Matt, to ask DraftKings to block his access.
I no longer wish to be able to bet, Matt told the company in an email. Additionally I would like the balance of my
winnings in the form of a check to a cause to help gamblers.
Instead of acting promptly upon his request, DraftKings emailed him promotional materials that included statements like:
You Scored Big! Your invite is inside: Claim your FREE Entry and Weve selected you for this! Your shot at winning $100K
tonight.
Matt has yet to receive his money, Ms. Alfert said.
Different Approaches
On Thursday, Massachusetts joined Nevada and New York in seeking to corral fantasy betting. But while Nevada and New
York have banned daily fantasy games, Massachusetts opted to regulate it by proposing safeguards.
The attorney general, Maura Healey, said in a statement that the regulations were intended to protect minors and to
ensure fair competition and truthful advertising.
Massachusetts will no longer allow anyone under age 21 to play daily fantasy sports. Operators say they accept only
players who are 18 or older, but players as young as 14 are playing daily fantasy, according to the Council on Compulsive
Gambling of New Jersey. The Times interviewed a player who began betting at 15.
The councils director, Neva Pryor, said fantasy sites should require players to prove their age with a drivers license.
Theres no age control, really, Ms. Pryor said. You can simply open an account in your name, check a box, and put in
whatever age you want to put in. Parents have opened accounts for children.
Massachusetts also wants to limit how daily fantasy companies entice college students. DraftKings offers a fantasy college
basketball competition and a chance to win a share of $1 million as the Fantasy College Football World Champion.
Under the states proposal, operators could no longer offer contests involving colleges.
Daily fantasy companies have until Jan. 22 to comment on the proposal. Both DraftKings and FanDuel have said they
prefer Ms. Healeys approach to Mr. Schneidermans.
FanDuel said Massachusettss approach makes a tremendous amount of sense. DraftKings offered a more tempered
response. While we do have some concerns with the draft regulations, we intend to work closely with the Attorney Generals
office to ensure we are operating in the best interest of our customers, the company said.
A Gamblers Way Back
11/23/2015 4:40 PM
4 of 4
One day last week, Mr. Adams rolled up his sleeve to show a tattoo of a bar code and a date in May 2014. He wanted a
reminder of the day he began to reclaim his life his last bet.
It was on a tennis match, not that he knew much about tennis, nor about Japanese basketball. He bet on that, too. The bar
code is a reminder of how much money he has lost.
Breaking his addiction required 25 days in a rehabilitation center and continuing meetings at Gamblers Anonymous. The
final step of recovery is to help other gamblers, and that is why he is telling his story, of the people he hurt, of the lost days he
can never recover.
In Gamblers Anonymous, we talk about prison, insanity or death, he said. The three arent mutually exclusive. I think I
was definitely on my way to all three of those places.
In his early stages of recovery, he stopped watching sports, but he has started watching again. He confesses to some
anxiety when he sees fantasy advertising, which he describes as having reached a grotesque level.
Thats one thing that bothers me when they say this year FanDuel is paying out over $200 million, he said. They
leave out what theyre taking in. They dont say that there are going to be more losers than winners.
He added: Thats dishonest.
Walt Bogdanich reported from Auburn, Ala., and Jacqueline Williams from New York. Megan Robertson contributed reporting from
Auburn.
A version of this article appears in print on November 23, 2015, on page A1 of the New York edition with the headline: Fantasy Sites Can Lead Addicts to a
Ruinous Path.
2015 The New York Times Company
11/23/2015 4:40 PM
For daily fantasy sports operators, the curse of too much skill - SportsBu...
http://www.sportsbusinessdaily.com/Journal/Issues/2015/07/27/Opinion/...
SBJ/July 27-Aug. 2, 2015/Opinion
For daily fantasy sports operators, the curse of too much skill
Published July 27, 2015, Page 15
aily fantasy sports is red-hot. In 2014, 1.5 million Americans paid more than $1 billion in tournament entry fees and FanDuel grew 300
percent in active customers. Yahoo announced on July 8 that it will join the fray. KKR,Comcast/NBC and others have invested in FanDuel,
whose valuation now exceeds $1 billion. DraftKings exclusive advertising deal with Disney reportedly guarantees $250 million in advertising on
ESPN. With sponsorships in every U.S. major league, DFS advertising will soon exceed the levels of online poker sites PokerStars and FullTilt
during the pre-2011 poker boom.
But investors are overlooking a fundamental operating challenge: the risk that the skill element of daily fantasy is so high that DFS pros will wipe
out recreational players in short order. For a real-money contest to achieve sustained popularity, it needs the right balance of skill versus luck.
Chess is popular but almost no one plays it for money, because its far too skill-based; the better player wins almost every time. Poker thrives
because an amateur can beat the best players in the world. Indeed, on June 13 at the World Series of Poker, a 51-year-old football coach from
Jupiter, Fla., defeated seven pros in the final table of a $5,000 tournament to win $567,000. Another tournament in May set a record for the
largest live poker tournament ever, with 22,374 entrants, pros and weekend warriors alike.
DFS affords a huge advantage to skilled players. In the first half of the 2015 MLB season, 91 percent of DFS player profits were won by just 1.3
percent of players.
The sharks split into two groups (see chart):
The top 11 players paid on average $2 million in entry fees and profited $135,000 each. They accounted for 17 percent of all entry fees. The
winningest player in our sample profited $400,000 on $3 million in entry fees.
The rest of the top 1.3 percent of players paid on average $9,100 in entry fees and profited $2,400 each, for a 27 percent ROI, which is
extremely impressive. These contestants accounted for 23 percent of all entry fees and 77 percent of all profits.
Where did the profits come from?
5 percent of players are the big fish; they lost $1,100 on entry fees of $3,600 on
average.
80 percent of players were the minnows; they lost $25 on entry fees of $49 on
average.
Hence, the DFS economy depends heavily on retaining the big fish. They had a
staggering loss rate of 31 percent of what they paid in entry fees and accounted for
75 percent of all losses. Each minnow loses less than $10 per month and may
happily continue to play forever, but each big fish loses more than $4,000 per year.
The entire DFS economy depends on these few players.
DFS strategy
The object of DFS seems obvious: pick the players who will hit home runs or score
touchdowns in a given day of games. But in large tournaments with headlinegrabbing prizes, payouts are skewed heavily to the top 1 percent of participants. Therefore, the goal is to create a lineup that will produce extreme outcomes (good
and bad) more often than the average lineup.
For example, a casual player might pick Mike Trout, Hanley Ramirez and Paul Goldschmidt in an MLB contest because they are star sluggers. A sharp player might
instead choose Curtis Granderson, Wilmer Flores and Lucas Duda because choosing players from the same team creates covariance, the Mets are at Wrigley, the
Cubs have a right-handed flyball pitcher on the mound, the wind will be gusting out to right field, and the Mets are a road favorite.
Inefficient pricing
Sports betting has thrived despite a large skill gap between the average sports fan and the sharp bettor. The reason is that the lines are set by a large, liquid market.
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You can walk up to a betting window in Las Vegas, select a team at random and still win almost 50 percent of the time. Betting randomly, you will lose money over
time, but your average loss will be only slightly over the 4.5 percent vigorish.
When you create a DFS lineup, you get a fixed salary cap and buy players at prices set by the site. Trout might cost you $5,500 out of your $50,000 cap, while
Granderson might cost just $3,500. But these prices dont reflect player values perfectly. For example, on some sites, they do not take into account the opposing
starting pitcher or game-day lineup changes. Finding underpriced players among 800 active MLB options can be overwhelming to the novice, but sharks use
sophisticated models to optimize their lineups.
No protection for novices

In poker, there is a large skill gap between the best players and the typical, recreational player. But fortunately for the recreational player, the best players wont be
found at their tables. The sharks focus their energies on the tables with $5,000 buy-ins and higher. You can sit at a $50 buy-in table and be safely insulated from the
best of the best, because its not worth their time to try to take your money.
In DFS, the top players can enter every contest. One player, maxdalury on DraftKings, every day enters nearly every MLB contest on the site, from the $10,600 buy-in
contests to the $1 buy-in tournaments. Indeed, sharp players often enter each small buy-in tournament dozens or even hundreds of times. The novice player is like
Neo in The Matrix Reloaded, fighting hundreds of Agent Smiths simultaneously.
Potential fixes
There are ways to mitigate these problems and give the game a better shot to thrive long term. Salary cap pricing could be made more accurate using algorithms that
exist today. Third-party fantasy sports analytics sites such as Rotoviz.com and Razzball.com publish game-by-game player projections that price players more
accurately than the salaries used by the DFS site operators.
Sites could float proposed salaries on an overnight market where, in a game within a game, sports fans could buy or sell players at their market salaries using play
money. These trades would then succeed or fail based on the players performances in the next days games. The reward for successful traders might be, along with
bragging rights, the ability to convert play money into free tournament entries or site merchandise. The reward for the sites would be salaries priced more efficiently by
the wisdom of the crowd.
Limits (e.g., no more than two players from the same MLB team) could be placed on lineup construction to make optimal strategies more intuitive. Sharp players could
be restricted from playing with more casual players. For example, FanDuel has limited the number of entries per day to prevent players from entering every single
contest. More radical changes to the game, including dropping the salary cap model entirely or offering bracket-style tournaments (like the NCAA basketball
tournament), are also possible.
FanDuel CEO Nigel Eccles points out that, Sports fans are passionate; they participate in fantasy leagues because DFS makes watching sports more exciting. The
rapid growth of DFS confirms his view. But at some point, will the bottom 5 percent of DFS players stop saying (like a 1950s Brooklyn Dodgers fan) wait til next year?
Ed Miller is an MIT-trained engineer and has written numerous best-selling poker strategy books including The Course: Serious Hold Em Strategy For Smart
Players. Daniel Singer is senior advisor and leader of the McKinsey & Company Global Sports and Gaming Practice.
Related Topics:
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Opinion
2 of 2
12/8/2015 2:18 PM

COUNTY OF NEW YORK
x

Index No. 102014-15
IAS Part
Justice Manuel Mendez
- against -
AFFIDAVIT OF
TIMOTHY DENT
STATE OF NEW YORK,
x
COMMONWEALTH OF MASSACHUSETTS
SS.:
COUNTY OF SUFFOLK
Pursuant to CPLR 7804(d), Timothy Dent, being duly sworn, deposes and says:
1.
I am the Chief Financial Officer of DraftKings, Inc. ("DraftKings").
2.
On the evening of November 10, 2015, DraftKings received a "cease-and-desist"
letter from the New York State Attorney General's Office ("NYAG").
3.
The NYAG's cease-and-desist letter and subsequent interactions with DraftKings'
partners and vendors has caused, is causing, and will continue to cause a direct and substantial
harm to DraftKings' customers, finances, and reputation.
4.
New York is home to more than 375,000 DraftKings customers and is among
DraftKings' largest markets, accounting for a significant percentage of the approximately 2.5
million total players who play in DraftKings contests. These DraftKings customers are diverse
and represent a broad spectrum of performance levels and experience. Imposing a ban on
Draft Kings' operations in New York would prevent these hundreds of thousands of DFS fans
from playing a game that they love.
5.
The cease-and-desist letter is also likely to cause other significant negative
consequences to Draft Kings' customer base nationwide. For example, in addition to cutting off a
significant source of Draft Kings' current and potential customers in New York, the cease-and-
desist letter is also likely to have a cascading effect nationwide, causing an unwarranted
significant chill on the play of current and potential new customers outside of New York.
6.
In addition, New York has been a critical market for DraftKings. Collectively,
DraftKings' New York customers account for approximately 7% of DraftKings' total entry fees
this year to date. DraftKings' New York customers account for more than $99 million in entry
fees year-to-date, generating more than $10 million in revenue to date. Should DraftKings cease
operations in New York, the loss of such a large percentage of total revenue from this key market
would be highly detrimental to DraftKings. Moreover, the New York market is quickly growing
for DraftKings: more than 125,000 new players from New York registered on DraftKings'
website in September 2015 alone, and approximately 113,000 DraftKings customers from New
York were active paying players last month.
7.
The NYAG's cease-and-desist letter is already harming DraftKings' ability to do
business in New York, in large part as a result of the NYAG's public statements and interactions
with DraftKings' partners and vendors. I understand that the NYAG and his representatives
have contacted DraftKings' vendors, financial institutions, and business partners and threatened
them with potential legal action if they continue to fulfill their contractual obligations servicing
DraftKings' business needs. This despite the fact that the NYAG's letter purports to provide
Draft Kings five business days-through Wednesday, November 18, 2015-to attempt to
persuade the NYAG that their conclusions are erroneous or to seek appropriate relief from the
NYAG's cease-and-desist letter.

8.
As but one example, on November 11, 2015, the day after we received the cease-
and-desist letter from the New York Attorney General ("NYAG"), I received a call from the
Chief Legal Officer ("CLO") of Vantiv Payment Processing ("Vantiv"), DraftKings' exclusive
payment processing vendor.
9.
Vantiv's CLO informed me that the NYAG had contacted Vantiv and instructed
the company to "immediately" stop processing payments from New York customers, despite the
five-business-day notice provision in the NYAG's cease-and-desist letter. Vantiv's CLO said
that the NYAG had threatened to take action against Vantiv if it did not cease providing services
to DraftKings in New York.
10.
Vantiv's CLO further informed me that, in the day or two after the cease-and-
desist letter issued, in addition to Vantiv, other DraftKings vendors (such as merchant banks),
had heard from the NYAG and had been instructed to cease providing services to DraftKings,
under threat of an enforcement action by the NYAG.
11.
Vantiv's CLO told me that Vantiv had decided, because of the NYAG's warning,
to shut down processing for New York customers no later than November 13, 2015. The
inability to process payments for New York customers would cause a massive disruption in
DraftKings' business, just three days after the NYAG's cease-and-desist letter.
12.
On Friday, November 13, 2015, DraftKings was forced to seek and did obtain an
ex parte temporary restraining order against Vantiv in the Superior Court of the Commonwealth
of Massachusetts, which required the company to continue processing payments through the
weekend. A true and correct copy of the court's TRO is attached hereto as Exhibit 1.
13.
Moreover, an important service provider of DraftKings has advised DraftKings
that it will stop servicing its account after 5:00 p.m. on November 16, 2015, unless DraftKings
obtains a TRO against the Attorney General's Office before then.
14.
The cease-and-desist letter is also having a chilling effect on vendors and partners
inside and outside New York State, including payment processors and advertisers, who fear that
continued business dealings with DraftKings could expose them to liability as a result of the
NYAG's uninformed and mistaken understanding of DFS play on DraftKings' platform.

15.
DraftKings has financial support from partnerships with major sports entities such
as Fox Sports, Major League Baseball, the National Hockey League, Major League Soccer, and
the owners of the New England Patriots, Dallas Cowboys, New York Knicks, New York
Rangers, and Los Angeles Dodgers. DraftKings also has business relationships with sports
companies such as The Madison Square Garden Company and Legends Hospitality. The
NYAG's cease-and-desist letter has impeded, is impeding, and will continue to impede
DraftKings' ability to continue its relationships with its current blue-chip list of investors and
partners. For example, in November of this year, ESPN, which has a multi-year marketing
partnership with DraftKings, temporarily pulled all DraftKings-sponsored segments from its
airwaves. A ban on DraftKings' operations in New York would greatly impair DraftKings'
ability to operate with its partners and investors.
16.
The cease-and desist letter is also having a chilling effect on DraftKings' ability
to retain and attract investors and partners. The cease and desist letter has already undermined
DraftKings' ongoing efforts to fundraise from private investors. I am aware of news reports
indicating that "Draft Kings was in the middle of a fundraising round when the AG's shift hit the
fantasy sports companies," and that "[t]he fundraising effort was stopped dead in its tracks."
Attached hereto as Exhibit 2 is a true and correct copy of a November 12, 2015 article from the
New York Post titled, "NFL team owners' Draft Kings stakes in danger." The cease-and-desist
letter is also having a material adverse impact on the valuation of the company, which has further
impaired DraftKings' ability to attract new investors and partners.
17.
The NYAG has also intentionally taken action that has caused, is causing, and
will continue to cause DraftKings irreparable reputational harm. The NYAG has wrongfully
proclaimed to the general public that DraftKings is an architect of a largescale criminal
conspiracy, accusing DraftKings of being a "leader[] of a massive, multibillion-dollar scheme
intended to evade the law and fleece sports fans across the country." The NYAG's unfounded
accusations have irreparably undermined DraftKings' hard-earned reputation, its relationships
with vital investors and business partners, the trust between DraftKings and its customers, and
deprived DraftKings of the ability to attract new partners and investors.
18.
A ban on daily fantasy sports in New York would also cause significant
reputational harm-to the DFS industry generally and to DraftKings specifically-that could
permanently and negatively impact DraftKings' business. As a relatively late entrant to the daily
fantasy sports market in 2012, DraftKings has operated at all times in a deliberate and good-faith
manner. DraftKings has strived to be open and transparent, including in advertisements to the
public, in offering a legitimate entertainment service that is enjoyed by millions of Americans.
DraftKings has acted at every turn and in good faith to operate in full compliance with the law.
19.
As far as I am aware, the only DFS operators that have received the NYAG's
cease-and-desist letters are DraftKings and FanDuel. The NYAG's actions against DraftKings
and Fan Duel alone, rather than the DFS industry at a whole, has caused and will continue to
cause irreparable harm to Draft Kings' reputation.
DATED:
Boston, Massachusetts
November 15, 2015
Timothy Dent
Sworn to before me this

r, 2015
15th day of
ve
ary Public
It,
LAURA ANN HOLLAND

Notary Public
My Commission Expires
June 25, 2021
EXHIBIT 1
SUFFOLK, ss.
SUPERIOR COURT
)
DRAFTKINGS, INC.,
Plaintiff,
v.
NBX MERCHANT SERVICES CORP.

(d/b/a Optimal Payments), VANTIV, INC.,
and VANTIV HOLDING, LLC,
)
)
)
CIVIL ACTION NO:
)
)
Defendants.
)
)
JPR
EDI TEMPORARY RESTRAINING ORDER
This cause came to be heard on Plaintiffs Emergency Motion for a Temporary

Restraining Order, and the Court having considered the Verified Complaint for Declaratory and
Injunctive Relief, Memorandum of Law in Support of Emergency Motion for a Temporary

Restraining Order, and it appearing to the Court after due deliberation that the Defendants are
committing or threaten to commit the acts set forth below, to the irreparable injury of the
Plaintiff:
IT IS HEREBY ORDERED that Defendants and each of them, and their respective
officers, agents, servants, employees, and attorneys, and those persons in active concert or
participation with them who receive actual or constructive notice of the order by personal service
or otherwise, be and hereby are restrained and enjoined until November
2015 at 5:00 PM
EST, or until such time as there has been a judicial determination of this action, from:
1.
Terminating or causing to be terminated the Bank Card Merchant Agreement,
dated on or about July 25, 2013, by and between DraftKings, Inc., NBX Merchant Services
Corp., and Fifth Third Bank,' as Amended by the Amendment to Bank Card Agreement, dated
September 2014, between the same parties (together, the "Agreement").
2.
Ceasing to provide any of the services contracted for under the Agreement,
including but not limited to payment processing services for Draft Kings' customers, or otherwise
ceasing to perform under the Agreement.
3
-114e-a-e4.1.
41
man s o t le New
or
ttorn
THE COURT FURTHER ORDERS that, for good cause shown in Plaintiff's Verified
Complaint for Declaratory and Injunctive Re ief and Memorandum of Law
leitalCifOOrder.
AA-31,r1,f4ett1/%19
ry
Restraining
-z-eoittfir-ad under Mass. R. Civ. P. 65(c) Or the issuance of this Tem
SO RDERED.
13)P--aeic62/6-Z /)441
Defendant Vantiv was formerly known as Fifth Third Bank and/or Fifth Third Processing Solutions, and
operates under the Agreement.
EXHIBIT 2
BUSINESS
NFL team owners' Draft Kings stakes in danger

By Josh Kosman and Claire Atkinson
November 12, 2015
11:33pm
New England Patriots owner Robert Kraft and Dallas Cowboys owner Jerry Jones.
Two NFL team owners could see their once-promising investments in Draft Kings get thrown for a loss, The Post has learned.
Robert Kraft, who owns the New England Patriots, and Jerry Jones, owner of the Dallas Cowboys, could be forced to sell their equity stakes
in the daily fantasy sports giant if New York succeeds in having DraftKings - and FanDuel, the No.1 fantasy sports site - deemed a
gambling enterprise.
"The NFL is reviewing the entire fantasy sports situation," said a source close to the NFL on Thursday, noting that the issue could pop up on
the agenda during the Dec. 2 owners' meeting.
"This is becoming a priority that is being discussed at the highest levels," the source added.
NFL policy strictly prohibits NFL employees or team owners from participating in or facilitating any form of gambling.
The investments came into sharper focus on Tuesday when New York Attorney General Eric Schneiderman, after a five-week probe,
concluded both companies' operations constituted "illegal gambling."

Schneiderman gave the companies five days to persuade him not to go to court in an attempt to have the daily fantasy games closed to
state residents.
The sites are expected to put up a fierce challenge to the AG - and they could be fighting for their lives.
While New York makes up just about 10 percent of the sites' business, if it succeeds, other states are sure to follow suit.
At the same time, the Department of Justice, which is also probing the matter, is expected to take some action before the end of the year, a
well-placed DC source told The Post.
The Department of Justice will move to declare daily fantasy site activity gambling, the source said.
The NFL itself has no investment in the daily fantasy sports sites, nor does it have any partnership deal. No NFL team logos are used on the
sites.
Meanwhile, The Post has learned:
The NFL is not helping out the companies in any way in Washington. Its powerful Beltway lobbyists are not getting involved,
according to one DC source and a person close to the league.
NFL Commissioner Roger Goodell, as recently as Oct 7 at an owners' meeting, cast a jaundiced eye on daily fantasy sports - saying
the 2006 law exempting fantasy sports from an anti-gambling law was aimed at season-long leagues and not daily leagues.
Draft Kings was in the middle of a fundraising round when the AG's shift hit the fantasy sports companies.
The fundraising effort was stopped dead in its tracks, sources said. The cash-raising could restart if the companies prevail over the
AG.
Draft Kings' last funding round attributed a valuation of $1 billion.

WCBS-TV, which is airing the Thursday New York Jets game locally, will not show any commercials for the daily fantasy sports giants.
The Cowboys, Patriots and Draft Kings declined comment.
Additional reporting by Richard Morgan and Kevin Dugan
FILED UNDER
FANTASY FOOTBALL, JERRY JON ES, NFL, ONLINE GAMBLING, ROBERT KRAFT
Recommended by
U tbrain

COUNTY OF NEW YORK
x

Index No. 102014-15
IAS Part
against
AFFIDAVIT OF
GREGORY B. KARAMITIS
STATE OF NEW YORK,
x
ss:
COUNTY OF SUFFOLK
Pursuant to CPLR 7804(d), Gregory B. Karamitis, being duly sworn, deposes and says:
Background
1.
I am Vice President of Analytics of DraftKings, Inc. ("DraftKings").
2.
I graduated from Cornell University in 2004 with degrees in both biometry and
statistics, and also biochemistry. From 2004 to 2006, I worked in a research laboratory doing
protein biochemistry research. From 2006 to 2008, I worked at Capital One Financial Corp.
doing credit risk analysis and credit policy. From 2008 to January 2014, I worked at Vistaprint
(now known as Cimpress) doing customer analytics, algorithmically driven merchandising, and
acquisition-based analytics.
3.
I have been an employee of DraftKings since January 2014. As Vice President of
Analytics, my job responsibilities include building and assembling a team of analysts who are
focused on using data and quantitative techniques to improve decision-making across the
organization. For example, our Analytics group records and measures how players interact with
the site, and subsequently recommends and tests new product features based on that learning
process.
4.
Another important role played by the Analytics group has been to study the level
of skill exhibited in DraftKings games, the factors contributing to skill in games, and how a
DraftKings player's skill level may improve over time. The Analytics group conducts these tests
regularly to ensure two things: (a) that skill plays a vital role in all existing DraftKings contests;
and (b) that in any new contest launched by DraftKings, the same will hold true-that is, the
element of skill plays a vital and predominant role in determining player performance.
5.
Daily Fantasy Sports ("DFS") have been around at least since the launch of
Fantasy Sports Live in June 2007. Current market leaders FanDuel and DraftKings have
operated since 2009 and 2012, respectively.
6.
DFS was a natural outgrowth of traditional season-long fantasy sports, which
have been around since as early as the 1960s. In the last decade, sports fans have grown
increasingly sophisticated and analytical about the sports they love. Traditional fantasy sports
have long provided fans with an opportunity to assemble a fantasy team of real-life athletes, and
then compete with other fantasy players on the basis of fantasy points earned by the real-life
performances of the real-world athletes assigned to players' respective fantasy teams. DFS
introduced the opportunity for sports fans to use knowledge, skill, and evidence-based analytics
to strategically assemble a team of undervalued athletes within firm salary constraints.
7.
Draft Kings offers a variety of contest types (e.g., large-field tournaments, head-
to-head contests, private leagues) in eleven different sports and e-sports.
Games of Skill
8.
Draft Kings' contests are incredibly complex, and their results are not tied to the
outcomes of real-world sporting events.

9.
Draft Kings' users pay an entry fee to enter a contest. Winners of the contests
receive prizes. The structure of the prizes-the amount that will be given to each winner based
on their results in the standings-is always known ahead of time when users decide to pay an
entry fee and enter a contest and does not change.
10.
Users' lineups are made up of between five and eleven real-world athletes, and
the success of those lineups depends on the combined performance in numerous statistical
categories of those real-world athletes across many real-world sporting events. DraftKings
assigns a fictional "salary" to each real-world athlete that could be selected to any fantasy team,
as well as a "salary cap" that limits the sum of the salaries of athletes that can comprise a user's
lineup. This mechanism prevents users from merely selecting the real-world athlete that they
believe will score the most points at every position in their lineup-such a strategy would cause
users to exceed the salary cap.
11.
The "challenge" of DFS-and the skill set required to play DFS successfully
has absolutely nothing to do with correctly predicting the ultimate win-loss outcome or margin of
victory of a basketball game or soccer match. Instead, the relevant skill set involves accurately
projecting the performance of individual athletes and strategically assembling individual athletes
into optimal lineups given the constraints of the salary cap and the payout structure of the
contest.
3
12.
Sophisticated DFS players know that "optimal" lineup construction varies
dramatically by contest type. In a head-to-head contest against a single DFS opponent, the
optimal lineup strategy primarily involves avoiding risk and maximizing the minimum expected
fantasy output of each lineup slot within the salary cap. In a large-field "Guaranteed Prize Pool"
(GPP) tournament (such as the highly publicized Millionaire Maker), however, merely
outperforming a single opponent or 50% of a tournament field is not good enough, since large
GPP contests generally award prizes only to the top 20% of entries. GPP prize pools are often so
top-heavy, in fact, that fewer than the top 1% of entries earn a prize of at least five times the
entry fee. The implication of this-something sophisticated players understand-is that

sustaining success in GPP contests over time requires employing an extremely high-variance,
high-upside lineup construction approach (e.g., "stacking" a quarterback and his top pass-catcher
in the same DFS lineup; targeting individual players historically proven to be "boom or bust"
performers; or targeting lesser known, "contrarian" players expected to be selected by relatively
few other DFS users).
13.
Compared to traditional season-long fantasy sports, DFS is significantly more
skill-based because two primary factors outside a user's control-athlete injuries and
unforeseeable poor performance-have no lasting impact beyond a single fantasy contest. In the
same vein, DFS forces a user to take into account additional factors about the games on a given
weekend such as weather variables, specific matchups of teams, specific matchups of athletes,
and many other factors-all of which would not typically be taken into account in traditional
season-long fantasy sports. Thus, where a season-long fantasy player might have to choose
whether to start either Tom Brady or Kirk Cousins in a given week if those are the only
quarterbacks on the player's roster (an easy decision since Brady is having an MVP-caliber year
to date), a DFS player in a given week's contest has to make a much more nuanced, thoughtful
decision the DFS player has to analyze which of the 32 starting quarterbacks to select at their
respective prices, keeping in mind that that decision will affect the rest of the player's lineup and
how much money he or she can spend to buy the other athletes in his or her lineup.
14.
DFS is also fundamentally different than other games for which the issue of skill
versus chance has been previously debated, such as poker. Although studies do, in fact, show
that poker contains a skill element, even a skilled poker player is at the mercy-every single
hand-of the cards she is dealt completely at random. Each player at a poker table starts a hand
on an unlevel playing field based on the two different cards that are assigned to him or her
completely by chance. In DFS, each user starts in the exact same position and has complete and
total control over the terms on which he competes-namely, the lineup(s) he chooses. The fact
that a DFS user has no control over player injuries is in no meaningful way different from the
fact that a billiards player has no control over the cue ball after it leaves the cue.
15.
To help measure the degree of control DFS users exercise over their outcomes,
DraftKings engaged Gaming Laboratories International ("GLI") to conduct sophisticated

computer simulations involving DraftKings contests in MLB, NBA, NHL, and NFL.
16.
To demonstrate whether outcomes were influenced by the inclusion of additional
factors in the lineup-selection process, GLI performed two different types of tests. GLI
compared both the performance of actual lineups of skilled DraftKings players in the four major
sports (MLB, NFL, NBA, and NHL) with unskilled randomly generated computer simulations,
as well as "skilled" computer simulations versus "unskilled" computer simulations.
17.
The results were dramatic and conclusive. The actual lineups from skilled
DraftKings players absolutely dominated the unskilled randomly generated computer
simulations. In MLB contests, the skilled players won 82.8% of the time; in NFL contests, the
skilled players won 83.4% of the time; in NBA contests, the skilled players won 96.1% of the
time; and in NHL contests, the skilled players won 81.9% of the time.
18.
The results of the GLI studies also demonstrated that across the board in all four
sports, real top DraftKings players outperformed even skilled computer simulations in the
comparisons against unskilled computer simulations.
19.
The fact that skilled human users outperformed unskilled randomly generated
lineups to a far greater extent than did "skilled" simulated lineups unequivocally underscores the
substantial advantage skilled users enjoy in DraftKings contests compared to less sophisticated
users. Thus, the results of the GLI studies make clear that the role of skill in DFS is critical to a
player's success.
20.
In another set of studies, Professor Zvi Gilula-former Chairman of the
Department of Statistics at Hebrew University and current Adjunct Professor of Statistics and
Econometrics at University of Chicago Booth School of Business-analyzed user performance

data provided by DraftKings encompassing the entire 2014-15 NFL season, the entire 2014 MLB
season, and the entire 2013-14 NFL season. Based on his analysis, Professor Gilula concluded:
"[O]ne MUST conclude that the fantasy games offered by DraftKings have an inherent and vast
character of skill where chance is overwhelmingly immaterial in the probability of winning in
such games" (emphasis in original).
21.
In his rigorous analysis, Professor Gilula identified numerous high-performing
users that enjoy win ratios in head-to-head contests of more than 80%. Using a binomial
distribution approach (in which only one of two outcomes can happen, i.e., a player can win or
lose), Professor Gilula was able to calculate the probability of certain win ratios being achieved
by random chance. For example, one Draft Kings user in Professor Gilula's dataset exhibited a
win ratio of 82.5% in 40 NBA head-to-head contests. Professor Gilula concluded that the
probability of achieving the same or better results by random chance would have been
0.00000000784, or less than eight times in one billion.
22.
In another recent publicly available study, Ed Miller-an MIT-trained engineer
and noted author of gaming strategy books-and Daniel Singer-the leader of McKinsey &
Company's Global Sports and Gaming Practice-authored an article in 2015 that was published
by Sports Business Daily entitled: "For daily fantasy sports operators, the curse of too much
skill." Miller and Singer concluded, among other things, that in the first half of the 2015 MLB
season, 91% of DFS player profits were won by just 1.3% of players, reflecting the skill-based
nature of DFS.
23.
Miller and Singer also identified two primary ways in which skilled users succeed
over unskilled users: (1) skilled users employ lineups that take advantage of covariance by
choosing multiple athletes from the same real-life team to produce the extreme DFS outcomes
good and bad-that are necessary to win an occasional "big score"; and (2) skilled users exploit
salary cap pricing inefficiencies by using sophisticated models to optimize their lineups by
projecting which athletes are most likely to under- or over-perform relative to their salary on a
given day. Practically speaking, then, skilled players often use lineups that take advantage of
covariance, meaning that they realize that if New York Giants quarterback Eli Manning has a
good game, then that likely correlates to his primary wide receiver Odell Beckham, Jr.'s also
having a good game. This type of sophisticated knowledge of a given sport once again
highlights the advantages that a skilled player has in DFS contests.
Along these lines, a column in the New York Post by Paul Me Polin that ran this
24.
past Thursday, November 12, 2015, vividly explained the many different factors that a
knowledgeable DFS player might consider when creating his or her lineup. In the column,
entitled, "I Challenge You to a Fantasy Football Duel, Eric Schneiderman," McPolin stated that
his knowledge of football played an essential role in creating his DFS lineups:
"But tonight, in the hours before kickoff, I will not close my eyes and throw darts
at arbitrary names on a wall to choose my lineups. I will analyze dozens of
factors to help predict which players will do well. I'll check the weather forecast,
the injury reports, the statistical history of the backups who might start. I'll
scrutinize every player's game log and weigh offensive and defensive run-andpass data. I'll examine strategic tendencies such as Todd Bowles' willingness to
blitz and Rex Ryan's love of the ground game. Then I'll get serious. I'll find the
average points the defenses give up against each position. I'll consider the
game's psychology: Will the revenge factor prompt Sexy Rexy to run up the
score? Are the Bills more desperate for a win? Does one quarterback tend to
choke in nationally televised games? Money management is key.
need to
decide if I spend more "salary" on the marquee running back or invest in two
lesser-known receivers
You see, it's all about preparation and knowledge"
(emphasis added).
.
DATED: Boston, Massachusetts

November 15, 2015
regory B. Karamitis

15th d of
, 2015
otary Public
LAURA ANN HOLLAND

Notary Public
ft'
My Commission Expires
June 25, 2021

COUNTY OF NEW YORK
-------------------------------------x
THE PEOPLE OF THE STATE OF NEW YORK, :
by ERIC T. SCHNEIDERMAN, Attorney General :
: Index No. 453054/2015
:
Plaintiff,
: IAS Part 13
:
: Justice Manuel Mendez
:
against
: AFFIDAVIT OF
: JASON ROBINS
:
:
DraftKings, Inc.,
:
Defendant.
:
------------------------------------ x
COMMONWEALTH OF MASSACHUSSETS
SUFFOLK COUNTY
)
) ss.:
)
Jason Robins, being duly sworn, deposes and says:

1.
I am the Chief Executive Officer and Co-Founder of DraftKings, Inc.
(DraftKings).
2.
I submit this affidavit in opposition to the States motion for a preliminary
injunction against DraftKings.

Background
3.
DraftKings is an online platform for playing daily fantasy sports contests with
friends, family, or other fantasy-sports enthusiasts. The company started offering daily fantasy
sports around April 2012. Today, DraftKings operates in 44 states and offers a variety of contest
types in eleven different sports as well as e-sports.
4.
I founded DraftKings approximately three and a half years ago, and it is one of
several online platforms offering daily fantasy sports. Fantasy Sports Live launched in June
2007, and FanDuel was founded around 2009. DraftKings has operated continuously in New
York State for the past three years.
5.
In developing DraftKings, my co-founders and I sought to offer sports fans the
same excitement and strategy as the season-long fantasy sports model, but with innovations like
more diverse gameplay and access to sophisticated data and research to help players hone their
skills and improve their performance. Depending on the sport and contest format, daily fantasy
sports contests can span between a day and a week, as opposed to lasting the entire season of a
sport. Just like season-long fantasy sports, daily fantasy sports allow players act as managers of a
fictitious sports team, requiring them to use their knowledge, skill, and strategy to assemble
individual athletes into an optimal lineup.
6.
DraftKings does not compete in the contests it offers. DraftKings only
administers the contests

7.
DraftKings has advertised on broadcast television and radio in New York since
June 2013 and has entered into sponsorship agreements with some of New Yorks major sports
teams, including the New York Yankees, New York Giants, New York Knicks, New York Mets,
New York Rangers, and New York City F.C.
Player Selection and Strategy
8.
DraftKings players select a combination of between five and eleven real-world
athletes (depending on the sport) for their fantasy teams. A teams success depends on the
statistics generated by a players particular combination of real-world athletes, which are
translated into fantasy points and can have trillions of possible scoring results. For example, the
number of yards a quarterback advances during a football game translates into a preset number
of fantasy points. Interceptions and fumbles translate into negative points. These are just a few
statistics among hundreds that contribute to a fantasy teams success.
9.
Unlike season-long fantasy sports, daily fantasy sports competitions do not
involve a fantasy draft, which restrict the available athletes a player can include in a team
throughout a season. Rather, DraftKings assigns a fictional salary to each real-world athlete
who may be selected for a fantasy team and institutes a salary cap to limit the fictional amount
a player may spend. Other than the salary cap, there are no restrictions on which athletes a
player may select. For example, multiple players can select the same athletes for their respective
teams. The primary challenge and thrill of daily fantasy sports is assembling the best possible
team while remaining under your salary cap. Because literally every athlete can be selected
each day or week in daily fantasy sports, the daily fantasy sports player has the ability to include
far more factors in his/her selection process than in seasonal fantasy sports, where the players
who can be selected are limited to a subset that mostly comes from the players they drafted
before the season began. This allows participants to be far more analytical and requires
significant research and analysis in order to be successful.
10.
Since athletes are priced according to expectations of their performance, a player
cannot afford to fill his roster with only the best performing and most famous athletes. Rather,
daily fantasy sports rewards players who use creative and strategic thinking in assembling the
best team while staying under budget. DFS players must consider the expected value and salary
of each real-world athlete, the overall composition of the roster, and the opportunity cost of other
real-world athletes who are not selected.
11.
Because there are so many real-world athletes to choose from, each with unique
performance statistics, there are billions of possible lineups a player can create. Because a
players success is based on the total combination of his athletes performance statistics, winning
does not depend on correctly guessing whether any real-life team wins or loses or correctly
guessing the margin of victory of a real-world sporting contest.
Entry Fees
12.
Some of DraftKings contests are free to enter, and for others DraftKings players
pay a flat entry fee to participate. Depending on how well their fantasy team performs, players
can earn prizes. Payout structures are fixed and clearly posted before a player enters a contest
and do not change, regardless of the amount of entry fees DraftKings collects for each contest.
13.
The entry fees paid by DraftKings players compensates DraftKings for its work
and expenses in providing daily fantasy sports contests to customers. DraftKings retains the
entry fees regardless of whether a player wins or loses the contest.
14.
While DraftKings sets the salaries and salary caps, it has no control over the
fantasy lineups selected by its customers or the results of the contests it provides. DraftKings
revenues also do not depend on the results of the contests it provides. Indeed, no statistics or
other real world outcomes affect DraftKings revenues, unlike a sports book where the house
has a vested interest in the outcome of the game and will award a different amount of prizes
depending on binary outcomes, such as which team wins or covers a point spread.
Velocity of Game Play
15.
Because there are only a limited number of real-life sports match ups, users
experience natural breaks in game play. For example, a player participating in a fantasy football
tournament will submit his lineup before games begin on Thursday evening, and then depending
4
on the game format, must wait for several days, until the conclusion of Monday night football, to
see how his team performed and enter a new contest.
Attorney General Investigation
16.
DraftKings has operated openly and transparently in New York for the past three
and a half years. Until the events that led to this proceeding, no state prosecutor had ever
questioned the legality of DraftKings in New York or brought charges against it.
17.
Around October 6, 2015, the New York Attorney General publicly announced
that he was reviewing daily fantasy sports. That same day, DraftKings received a letter asking
for information about the company. These announcements and investigations came on the heels
of press reports that a DraftKings employee, Ethan Haskell, may have used certain non-public
DraftKings data to gain an unfair financial advantage in a contest that he entered, and won, on
FanDuel. As shown by the investigation of Greenberg Traurig, LLP, this ended up being a false
allegation, which DraftKings disproved by providing time-stamped communications confirming
that Mr. Haskell could not possibly have entered the winning lineup based upon his receipt of
the Companys nonpublic aggregate ownership percentage information, because he did not
receive that information until 40 minutes after the lineup was locked. A true and correct copy of
DraftKings report on Greenberg Traurigs investigation is attached hereto as Exhibit 1. The
report is available online at http://pb-cdn.draftkings.com.s3.amazonaws.com/wpcontent/uploads/2015/10/DraftKings-Independant-Summary-of-Findings-GT-FINAL.pdf.
18.
After receiving the letter from the Attorney General, DraftKings told the
prosecutors that it would comply fully with their investigation. Between October 9 and 29, 2015,
DraftKings counsel met with Attorney General representatives on several occasions and
responded to their inquiries. During this dialogue and cooperation, the Attorney Generals office
never indicated that it considered daily fantasy sports to be gambling or that it sought compliance
with state gambling laws. The company offered to provide any data or information on any
subject whatsoever, and not once did the NYAG request data related to the skillfulness of
DraftKings product. In fact, DraftKings had previously conducted (through an independent third
party) a skill analysis of its games that would have demonstrated the games are far more based
on skill than chance. However, the NYAG declined to request such information despite the fact
that it was highly relevant to the NYAGs claim that daily fantasy sports contests are games of
chance.
DATED: Boston, Massachusetts

November~ 2015
Jason Robins
CERTIFICATE OF CONFORMITY
The undersigned does hereby certify that she is an attorney at law duly admitted to
practice in the Commonwealth of Massachusetts and is a resident of the Commonwealth of
Massachusetts; that she makes this affidavit in accordance with the requirements of the Clerk of
the County of New York pertaining to the acknowledgement of the proof of the Affidavit of
Jason Robins, to be filed in the Supreme Court of the State of New York, New York County; that
the foregoing acknowledgement of Jason Robins named in the foregoing instrument taken before
Laura Ann Holland, a Notary in the Commonwealth of Massachusetts, being the state in which it
is taken, and based upon my review thereof, appears to conform with the law of the
Commonwealth of Massachusetts, as to the purpose for which it is submitted and filed.
Dated: November 24, 2015

24th day ofNovember, 2015
"
WENDY MATTO
NOTARY PUBLIC
My Comm. Expires Aug. 19, 2016
EXHIBIT 1
DraftKings Summary of Findings

October 19, 2015
RE: Investigation on Allegations against DraftKings employee Ethan Haskell
Led by former U.S. Attorney for the District of Massachusetts, John Pappalardo of Greenberg
Traurig, LLP.
Methodology:
In the course of its investigation, Greenberg Traurig, LLP (GT):
1) Met and interviewed all senior management concerning the allegation that was reported in the
media that Ethan Haskell, a DraftKings employee, was in possession of non-public information
which could have been used to prepare and submit a lineup with FanDuel that won him $350K.
2) Reviewed all documentation generated by the DraftKings internal inquiry and discussed the
findings and analysis.
3) Initiated a comprehensive and totally independent investigation of the allegation.
4) Prepared an investigative plan to identify relevant individuals, electronic data and documents
and relevant systems and applicable policies and procedures.
5) Secured complete access to individuals, documents and systems at the Company and identified
sources of information outside the company.
6) Conducted comprehensive interviews of various individuals within the Company possessing
relevant information, and certain individuals were interviewed multiple times as facts
developed.
7) All documents relevant to the investigation were reviewed, authenticated and considered.
These include email correspondence, posts, computer generated data, electronic entries, etc.
GT requested and received documentation from sources outside the Company.
Report Summary:
Immediately upon learning of the allegations that DraftKings, Inc. (DraftKings or the
Company) employee Ethan Haskell had misused DraftKings non-public information in
connection with his own Daily Fantasy Sports play, DraftKings conducted an internal
investigation into the facts giving rise to those allegations, and into Mr. Haskells access to, and
use of, the Companys non-public data.
Following its internal investigation, the Company retained a team from internationallyrenowned law firm GT, led by A. John Pappalardo, the former United States Attorney for the
District of Massachusetts, to independently review the Companys findings.
DraftKings, Inc.
225 Franklin Street, Boston, MA 02110
GT has received complete cooperation from the Company at every turn, and has been given
unfettered access to all documents, systems, and individuals. GTs independent investigation
has confirmed that the Companys initial findings were correct, and that the allegations that
Mr. Haskell gained an unfair advantage in the $5M NFL Sunday Million contest due to his
possession of the Companys non-public information are without merit. GTs independent
investigation has concluded that it was impossible for Mr. Haskell to have gained such an
advantage in the FanDuel contest in which he won a prize because he received the non-public
information forty minutes after the deadline for submitting his lineup in the FanDuel contest.
The Companys detailed findings:
A fantasy lineup identified as S227527336 was submitted in the FanDuel.com $5M NFL Sunday
Million at 3:28 a.m. on Sunday, September 27, 2015. The lineup was submitted under an
account registered to DraftKings employee Ethan Haskell.
At 1:00 p.m. the same day, the FanDuel $5M NFL Sunday Million contest began. As of that
moment, any player participating in the contest no longer had the ability to modify his or her
contest lineup. In other words, the lineup was locked at 1:00 p.m.
Fully forty minutes later, at 1:40 p.m., Mr. Haskell received an excel file containing aggregate
player ownership percentages for the DraftKings Millionaire Maker contest. The excel file
contained aggregate player ownership percentages for players in all weekend NFL games,
including games not yet played. The Company had not previously elected to make such
information public.
Lineup S227527336 ultimately won second prize in the $5M NFL Sunday Million contest.
Conclusion:
GTs independent investigation has confirmed the Companys conclusion that Mr. Haskell could
not possibly have entered the winning lineup based upon his receipt of the Companys nonpublic aggregate ownership percentage information, because he did not receive that
information until 40 minutes after the lineup was locked.
DraftKings, Inc.
225 Franklin Street, Boston, MA 02110
SUPREME COU RT OF THE STATE OF NEW YORK

COUNTY OF NEW YORK
-------------------------- --------- --x

Plaintiff,
Index No. 453054/2015

!AS Part 13
against -
AFFIDAVIT OF
PETER JENNINGS
DraftKings, Inc.,
Defendant.
------------------------------------ x
STATE OF COLORADO
DOUGLAS COUNTY
)
)ss.:
)
PETER JENNINGS, being duly sworn, deposes and says:

1.
I am an avid player of daily fantasy sports on website platforms DraftKings and
FanDuel.
2.
I submit this affidavit in opposition to the State's motion for a preliminary
injunction against DraftKings, lnc. (..DraftKings").

3.
Sports have long been a passion of mine. Beyond rooting for professional teams
in my home state of Colorado, I played three sports in high school and pa11icipated extensively in
college intramurals.
4.
Before I began playing daily fantasy sports (or " DFS") professionally, I worked
as a stock broker. I earned my bachelor's degree in finance from Colorado State University. My
first foray into season-long fantasy sports was around 2003. Fantasy sports quickly became a fun
way for me to compete with friends and strangers over who had the most sports knowledge.
From that point, r participated in about I 5different fantasy lea&rues throughout high school and
college.! began playing daily fantasy sportscasually around January 20 11 . Through trial and
error, I learned to developthe analytical skills necessary to consistently succeed in daily fantasy
sports.
5.
I am now a professional player who regularly competes in elite daily fantasy sport
tournaments. I have earned a net profit on daily fantasy sports since 2012. Most recently, I took
the top prize of $1 million doll ars at tbe DraftK ings Fantasy Baseball Tournament in the
Bahamas. I believe my success is the result of the immense amounts ofresearch and preparation
and the sophisticated analysis I have developed over years of playing.
Hours
6.
Typicall y I spend about 70 to 80 hours per week preparing, watching games,
researching, and playing DFS contests. During the fall season- from about September to the end
of the year-my hours of play and preparation increase to about 90 hours a week because of the
high volume of games.
Athlete Tracking
7.
Because the core strategy of DFS involves assembling the best possible team
combination and deciding which players to draft, I spend much of my preparation time tracking
athlete perfonnance to come to an independent judgment about whether to add a player to my
fantasy team line up. To make this assessment, 1:
Watch hours of game tapes for various athletes on YouTube;
Watch as many games as possible onmy four televisions and multiple computer
monitors;
2
Watch every NFL game on NFL Rewind, an online service offered by NFL
Network that streams already-completed NFL games;
Study batted ball speed to analyze hitter performance (for fantasy baseball); and
Track injuries and sports news via Twitter, sports beat reporters, and local
newspapers.
Extraneous Factors
8.
In addition to creating models and collecting information about player
perfonnance using the infonnation described above, I consider extraneous factors that can affect
my fantasy team s performance.
9.
Because weather has an impact in nearly all sports, I consider forecasts. For
example, wind can sway results in baseball and football, and balls travel farther in hotter
weather. I also consult air density reports to determine the likelihood of homeruns.
10.
Because some referees and umpires are more likely to call balls or strikes based
on past games, my models account for the influence their callscan have on player perfonnance.
l I.
I also consider subjective factors of game playlike game psychology. Players can
be affected by various psychological forces on the field. For example, rivalry games can make
player passions run high. Athletesmay also be more likelyto outperfom1 after a humiliating loss. I
also note when an athlete will be playing in his hometown to account for the impact family and
friends ' presence may have on his performance.
Modeling
12.
1 create my own custom player projections and models based on the infon11ation
and historic performance data I collect. These models employ advanced statistics to predict
player outcomes. I also use game theory to maximize my return on investment in
3
tournaments.Game theory allows me to think rigorously about which athletes have high upside
potential. For example, I use it to assess the value of athletes who are not as frequently drafted
orathletes that may be overvalued because they have recently played well.
Sharing Strategy
13.
After gaining some notoriety for my fantasy sports success, I began sharing my
strategy tips to help beginners improve their skills. I co-founded the website Fantasy Labs, which
allows users to access various data analytics tools, leverage trends, and create customized models
to improve their daily fantasy sports perfonnance. Recently, a user of Fantasy Labs models took
the second place prize at a DraftKings millionaire maker competition.
14.
I have also spoken at various universities about sports data analytics. In February
2015, I served on a panel at the MIT Sloan School of Business's Sports Analytic Conference.In
the summer of 2014, Ispoke to the sports business program at Colorado University-Boulder.
Seasonal Fantasy Sports Sites Also Award Prizes

15.
In addition to having expertise in DFS, I am also familiar with Seasonal Fantasy
16.
Like DFS sites, Seasonal Fantasy Sports sites frequently offer seasonal
Sports.
competitions that award prizes to the top competitors.

17.
For example, according to information on ESPN.com, ESPN offers seasonal
fantasy football competitions with a grand prize of $10,000 for the first place finisher. Exhibit I
is a true and correct copy of the offering. The original offering is available online at
http://games.espn.go.com/ffl/resources/help/content?name=Prizes.
18.
NFL.com also offers seasonal fantasy football competitions that award prizes to
winners. Exhibit 2 is a true and correct copy of an August 26, 2011 Sports Media News article
titled " NFL.com Fantasy League champions can win Super Bowl tickets, championship rings &
more v ia 'NFL Fantasy Ultimate Experience."' The original article is avai lable on line at
http://spo11smedianews.com/nf1-com-fantasy-league-champions-can-win-super-bowl-ticketschampionship-rings-more-via-%E2%80%9Cnfl-fantasy-ultimate-experience%E2%80%9D/.
DATED: Lone Tree, Colorado

November 23 , 2015

23rd day of November, 2015
STEVEN ZAUGG
NOTARY PUBLIC
STATE O F COLORADO
NOTARY ID 20034009024
MY COMMISSION EXPIRES 01/19/2019
The undersigned does hereby certify that he is an attorney at law duly admitted to
practice in the State of Colorado and is a resident of the State of Colorado; that he makes this
affidavit in accordance with the requirements of the Clerk of the County of New York pertaining
to the acknowledgement of the proof of the Affidavit of Peter Jennings, to be filed in the
Supreme Court of the State of New York, New York County; that the foregoing
acknowledgment of Peter Jennings named in the foregoing instrument taken before Steven
Zaugg, a Notary in the State of Colorado, being the state in which it was taken, and based upon
my review thereof, appears to conform with the law of the State of Colorado as to the purpose
for which it is submitted and filed.

/
~ 1\1. day of ~ 0 VJ/It.~
~(f
~ ~ 1:
l, k---Ncitary Public
JANIE F. COHEN
NOTARY PUBLIC
STATE OF COLORADO
NOTARY ID# 19944009098
. ~y COMMISSION EXPIRES SEPTEMBER 24 2019
'.
:~ ..-.;. : ......,.!~ ... ""."::"- ,;ooi~ . .... ~~
EXHIBIT 1
11/23/2015
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FANS ARE BACK TO NFL.COM FANTASY FOOTBALL

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NFL.com Fantasy Seeing Record Growth: More than 50% Increase in

Signups
Worlds Only NFL Fantasy Game with Video Now Including Instant InGame Highlights
NFL Fantasy Ultimate Experience Offers Fantasy Prizes only the NFL
can make a Reality
NFL.COM FANTASY FOOTBALL, the official game of the NFL, is setting
record numbers as fans get back to football, with a more than 50%
increase in signups to date this year. For the first time, NFL.com fantasy
players will have access to exclusive NFL video with instant in-game
highlights. Once a big play happens, the video highlight will appear on
your screen as quickly as 30 seconds.
Fans are choosing NFL.com Fantasy Football because when you want
the NFL, you go to the NFL, said JEFF BERMAN, GM of NFL Digital
Media. Fantasy players want everything instant and NFL.com is the only
home for immediate highlights anywhere online. No other fantasy game
can offer anything close.
In addition to instant video, NFL.com is offering a suite of new and

enhanced functionality and research, including:
First-to-the-fan official injury information detailing practice status,
game status and active/inactive information an hour before a game
starts
Tracking of player Targets and Touches to predict the next
breakout star
2/8
11/23/2015
Advanced RedZone Opportunity analysis to select the top

performers
In-depth Fantasy Points Against (FPA) information
Drag-and-drop roster changes
Additional trends and research to assist in managing the best
possible team throughout the season
The NFL is providing fantasy players with a suite of new tools on mobile
platforms as well.
As fans go increasingly mobile, NFL.com is offering fantasy players
opportunities to research, manage teams, and stay up-to-the-second
while on the go, said CORY MUMMERY, Director of NFL Fantasy.
The NFL is giving fans a free new mobile website (m.fantasy.nfl.com),
along with free iOS and Android applications that enable
NFL.comFantasy players to manage their teams from their mobile
devices including:
Track live scoring on the go & track a teams performance in real
time
Set lineups and add players
Propose and accept trades
Create and/or join leagues
Up to the second player news, including official injury reports
In addition, for the first time users may access the full NFL.com Fantasy
Football game on a tablet with an optimized version of the game.
In time for draft season, the NFL is bringing fans NFL Fantasy Cheat
Sheet 11, one of the most popular fantasy football draft apps of the past
three seasons now with official marks, logos and data including NFL
3/8
11/23/2015
historical stats. The improved app contains robust content such as

Average Draft Position (ADP) and Average Auction Value (AAV) and
includes new for this season the latest player news, injury reports and
depth charts; team offensive and defensive rankings; Individual
Defensive Players (IDP); the ability to track keepers; the consistency
rating for each player; and a Value Based Drafting (VBD) algorithm
customized for each league with players ranked based on value instead
of points. NFL Fantasy Cheat Sheet 11 is available for Android and iOS
devices.
Further, NFL.com Fantasy players can get fantasy news and video
through NFL Mobile only from Verizon.
New this year, NFL.com Fantasy Football is offering the NFL FANTASY
ULTIMATE EXPERIENCE, providing fans the opportunity to win prizes that
only the NFL can provide. Users may play for these unique prizes by
either joining an NFL-Managed league or through League Manager
upgrades within their custom league. NFL Fantasy Ultimate Experience
offers nearly 20 different prizes including: custom Fantasy Super Bowl
ring; officiating flags; Golf Tournament with NFL alumni; NFL Dream
Camp experience; and once-in-a-lifetime experiences at NFL events
including Super Bowl XLVI, the 2012 NFL Combine and the 2012 NFL
Draft.
In August 2007, NFL brought the operations of NFL.com in-house and relaunched the site. In June 2010, NFL brought operations of NFL.COM
FANTASY FOOTBALL in-house and launched its game. NFL.com is the
home for the most NFL highlights and video on the web.
###
4/8
11/23/2015
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5/8

COUNTY OF NEW YORK
--- - ------------------ -------- -------x

of the State ofNew York,
Index No. 453054/2015
Plaintiff,
IAS Part 13
against-
AFFIDAVIT OF
DR. ABRAHAM J. WYNER
DraftKings, Inc.,
Defendant.
--- -------- -------------- ------ -- - -- x

COMMONWEALTH OF PENNSYLVANIA
)
) ss.:
PHILADELPHIA COUNTY
DR. ABRAHAM J. WYNER. being duly sworn, deposes and says:

1.
I am a tenured Professor of Statistics at the University of Pennsylvania's Wharton
School of Business, where I also serve as Chair of the Undergraduate Program in Statistics. In
1988 I completed my own undergraduate education magna cum laude at Yale University with a
BS in mathematics. Then, in 1993, I earned my Ph.D. in Statistics from Stanford University.
My expertise is in probability theory and statistics, topics on which I publish scholarly works and
present at conferences and universities. I currently also host a weekly ractio show on Sirius XM
called "Wharton MoneyBall" where fantasy sports games are frequently discussed.
2.
I submit this affidavit in opposition to the State's motion for a pre liminary
injunction against DraftKings. Inc. ("DraftKings"). I provided the analysis below at the request
of Boies, Schiller & Flexner LLP, attorneys for DraftKings.
3.
The documents that I have reviewed are shown in Exhibit 1. A current copy of
my curriculum vitae can be found in Exhibit 2.

Background&Scope
4.
The Attorney General of the State of New York has filed a complaint on behalf of
the people of New York against DraftK.ings, a company that offers daily fantasy sports ("DFS")
competitions. The complaint asserts that DFS is illegal gambling because participants allegedly
wager on "contests of chance" or on "future contingent events" not under the participant's
"control or influence."
5.
There are games in which chance has a sufficiently low influence on the outcome
so as to be immaterial. This determination is difficult to make because there is no well-defined

principle in mathematics or statistics that can be used to measure the precise influence that
chance has over the outcome of a contest or game.
6.
Nonetheless, in my research and writings, I have worked to understand the
interplay between chance and skill, so that an informed determination can be made. My analysis
applies this knowledge to determine whether chance plays a material role in DFS contests.
Guiding Examples and Basic Principles
7.
First, consider a few examples of chance- and skill-based games to help
understand the basic principles involved:

8.
Consider games that are entirely chance-based (e.g., casino games like slot
machines, craps, or roulette). The key feature in games of this type is that there is little or
nothing to learn other than the rules. There are no strategies. There are no decisions that can
alter the odds of winning. Every player is the equal of every other.
9.
Now consider the opposite end of the spectrum: games that are virtually entirely
skill-based (e.g., chess). For these contests, the difference between players' abilities, talents, and
skills is nearly always the determining factor. The key feature is the nearly unlimited levels of
ability that differentiates participants. Players can improve their skills with effort and learning.
These games have large numbers of choices, decisions, and strategies that have a material impact
on the outcome. In contests that pit two players at different levels of mastery, the stronger player
wiJI usually defeat the weaker player.
I 0.
There are games at other positions along the spectrum of skill and chance that
involve both-for example, Scrabble. The popular word game Scrabble involves both skill and
chance. The skill component involves strategies and talents that introduce considerable
differentiation among players. But chance still plays a role; for example, letter tiles are drawn at
random. Nevertheless, it is generally acknowledged that skill dominates: a more skilled player
will usually defeat a weaker player. To master skills in Scrabble takes a great deal of effort and
learning.
11.
Poker is at a different place along the spectrum. Poker involves considerable skill
and in the long run better players will earn more money than weaker players. But in a given
hand of play, the game is chance-dominated. Since a player's options are quite )jmited, it often
happens that a weak player will defeat a stronger player on a given band, but not in the long run
over the course of a sufficiently large number of hands.
12.
Statistically, an event is "random" if it is unpredictable. There are different types
of randomness-some of these are internal to the game and other external. Obvious examples of
internal randomness are cards or dice-the stock features of traditional forms of gambling.
Another form of internal randomness is introduced by unpredictable variation in a player's
performance (e.g., a soccer goalie's successful block of a penalty kick) or caused by a referee's
inconsistent and sometimes erroneous decision making.
13.
External randomness has nothing to do with the game itself but is sometimes an
important consideration. External randomness is introduced when a player' s opponent is

assigned using an unpredictable or random mechanism. If an opponent is disqualified (perhaps
by injury) then victory can be secured by a mechanism having nothing to do with the game itself.
These forms of randomness are external but still important, since they can have an enormous and
often dominant impact on a players "chance of winning" while having nothing to do with a
game's relative balance of skill and chance.
Requirements of Skill-Dominant Competitions
14.
Skill-dominant games (i.e., games in which chance does not play a material role
in the outcome) possess three properties: Depth, Complexity, and Differential Impact. These
properties are necessary and sufficient.
a. DeQth: The game must have depth with difficult material to study, learn, and
practice. A game that is skill-dominant can be mastered, but only with a great
deal of effort, dedication, and talent.
b. Complexity: During gameplay, there must be many decisions, strategies, and
choices with material impact on the outcome. That is, the game must be complex
enough so that novices cannot stumble accidently into a winning position with
any frequency .
c. Differential Impact: There must be many levels of proficiency. Furthermore,
when two players with distinct levels of mastery (i.e., skill level) enter into a head
to head contest, the more proficient player should usually win.
15.
Note that it is not sufficient for an expert to usually defeat a novice. The "expert"
needs to be able to consistently defeat the "very good" player, too, and so forth down the ladder
of levels (e.g., the "merely good" needs to consistently defeat the "average").
16.
Next, consider a head-to-head competition involving two players of nearly equal
skill level. Since the skill levels are balanced, if the contest has any internal chance component
at all, then the specific outcome of the contest will be determined predominantly by a
combination of internal chance and external randomness. This may appear to be a paradox, but it
is nevertheless to be expected even in games that are almost entirely skill-based. Even in a game
as skill-dominated as chess, for example, an equally skiUed opponent's choice of opening moves
may affect the ultimate outcome of the game. Likewise, an internal chance mechanism for
equally skilled chess players comes from the simple selection of which player moves first.
17.
A similar situation arises when contestants are randomly selected among a large
pool of competitors of varied quality. In such situations, an unskilled player's likelihood of

winning the contest depends predominantly on external randomness- the choice of their
opponent-even when the game itself is skill dominant. This is especially true when the field
contains many unskilled players and a relatively small proportion of skilled players, then an
unskilled player's "chance of winning" will depend significantly on the quality of the opponent;
a chance determination that has nothing to do with the game itself.
18.
Returning to the previous example of Scrabble, it is easy to see that the game
possesses all of the three properties mentioned above. First, there are many complex strategies
and difficult tasks; this satisfies the qualification for depth. Second, in any one Scrabble game
there are innumerable choices and decisions; this satisfies the qualification for complexity.
Finally, better players will usually defeat weaker players across the entire ladder of skill; this
satisfies the qualification for differential impact. Note that there is nevertheless a component of
chance: When players of nearly equal ability play each other, the random tiles chosen will
determine the outcome, not skill.
19.
In contrast, poker fails to satisfy two oftbe three qualifications. Poker is certainly
a deep game with much to study and many skills to acquire. Nevertheless, in a single hand of
poker there is not enough decision complexity; players have only a limited palette of choices
(fold, call, or raise) and thus even a novice will frequently play "properly" just by chance. Also,
talent and skill do not have a large enough impact on a round. A great player will not beat a
good player with regularity, although he will have an edge- the cards have too great an impact.
In a hand of poker, differences in skill do not have a large impact on the outcome.
Daily Fantasy Sports
20.
As explained below, daily fantasy sports contests satisfy all three requirements to
be skill-dominant competitions.
Depth
21.
To play DFS successfully, contestants need to have deep knowledge in three
difforent subject areas: (i) sports, (ii) statistics, and (iii) economics. Since advanced knowledge
in all three areas is necessary to be extremely skilled at DFS, it follows that highly successful
players should be exceptional, which is indeed the case.
a. Selecting a fantasy roster requires an understanding of the sport and its rules. It is
particularly important to understand that fantasy teams are largely not evaluated
on the performance of teams in real-world games- for example, a real-world
team could lose a game, while the DFS player who selects that team's athletes for
his fantasy team could still win the DFS competition. Therefore DFS players
need to understand the real-world athletes and how they function in the different
player positions which affect the fanta!,y score, since that impact follows its own
set of patterns.
b. Statistical knowledge is essential for forecasting player performance. In fact, a
successful team is built on high quality prediction systems.
c. Similarly, knowledge and proficiency with economic concepts is necessary
because a fantasy team is constructed using a salary-based system, whereby
players assemble a roster by recruiting athletes at set prices (i.e., based on the
"salaries" ascribed to the athletes). A quality player must learn to select high
impact athletes at bargain prices in order to consistently defeat opponents. In
essence, a player must learn to play a high quality Moneyball.
Complexity
22.
In DFS, a pfayer has to construct a fantasy roster with multiple player choices at
multiple positions. These decisions are the determining factor in the outcome (since they
determine how points are ultimately attributed to the team).
23.
The player also must abide by budget constraints (i.e., a total "salary cap" on the
team), which make strategy very important and challenging. For this reason, it is extremely
unlikely that a novice accidentally assembles a high-performing team.
Differential Impact
24.
To establish differential impact of skill level on the outcomes in DFS I refer to
two sets of research reports that address the question of how players' different skill levels impact
the outcome of play.
a. The report prepared by Professor Zvi Gilula, former Chair of the Department of
Statistics at Hebrew University and current Visiting Professor of Statistics and
Econometrics at the University of Chicago Booth School of Business.
b. Four analyses undertaken by Gaming Laboratories International, LLC (GLI).
25.
The GLI analyses show, in four different professional sports (MLB, NFL, NHL,
and NBA), that highly skilled players will defeat complete novices at DFS (represented by
"unskilled" computer simulations selecting randomly-generated teams) anywhere from 80 to 90
percent of the time, depending on the sport. They also show that the most skilled players will
typically defeat skilled computer-based strategies.
26.
Prof. Gilula's report shows that there are players whose successes cannot be
explained by chance. From Prof. Gilula's data, I can also deduce that there are differing skill
levels among the top-performing players: Table 5 of the report shows the win ratio obtained by
top performing players. There are players who have won every single one of the more than
approximately 75 entries submitted, players who have won approximately 80%, and others who
have won 67% of their entries. What this means is that not only are there highly skilled players
for whom chance plays a non-material role, but that there are many levels of skill among players,
where the best win most, the second-best win less often, and so on down the ladder of skill
levels.
Conclusion
27.
DFS is deep and complex, and players with the most skill will usually and
consistently defeat players with less skill. Although there is a chance component in certain DFS
contests, DFS satisfies all the necessary and sufficient requirements for skill-based games in
which the outcome does not depend in a material degree on chance.
28.
I reserve my right to revise my opinion as additional information becomes
available to me.
DATED: Philadelphia, Pennsylvania

November 23, 2015
Dr. Abraham J. Wyner

23rd day of November, 2015
I
1
NOTARIAL SEAL
.
GERALDINE PETTEY. Notary Pubhc
Citv o p, i1ad,'!o;.ia, Phila. County
My Cc1
,.~ . i"~!J?.:Y
...._.,___
_'..rni""''0'1
_"'' "':-.:... .:~:...:.J::_.
_4. .14,
- 2017
.--
The undersigned does hereby certify that he is an attorney at law duly admitted to
practice in the State of Pennsylvania and is a resident of the State of Pennsylvania; that he makes
this affidavit in accordance with the requirements of the Clerk of the County of New York
pertaining to the acknowledgement of the proof of the Affidavit of Abraham J. Wyner, filed in
the Supreme Court of the State ofNew York, New York County; that the foregoing
acknowledgment of Abraham J. Wyner named in the foregoing instrument taken before
Geraldine Pettey, a Notary in the State of Pennsylvania, being the state in which it was taken,
and based upon my review thereof, appears to conform with the law of the State of Pennsylvania
as to the purpose for which it is submitted and filed.
Franco A. Corrado
COMMONWEALTH OF PENNSYLVANIA
Notarial Seal
Rosemary L. Lavin, Notary Public

City of Philadelphia, Philadelphia County
My Commission. Expires Aug. 23, 2016
MEMP~fi. P~NNiiiYLVANtA M~ocn110N OF NOTARIES
EXHIBIT 1
Document Reviewed
Memo to Tim Dent re Skill Simulation Analysis of DraftKings Daily Fantasy Hockey
Contest by Gaming Laboratories International (April 15, 2015).
Memo to Tim Dent re Skill Simulation Analysis of DraftKings Daily Fantasy Basketball
Contest by Gaming Laboratories International (June 19, 2015).
Memo to Tim Dent re Skill Simulation Analysis of DraftKings Daily Fantasy Hockey
Contest by Gaming Laboratories International (July 9, 2015).
Memo to Tim Dent re Skill Simulation Analysis of DraftKings Daily Fantasy Football
Contest by Gaming Laboratories International (July 24, 2015).
Expert Report of Professor Zvi Gilula, dated April 27, 2015.
EXHIBIT 2
Abraham J. Wyner
Department of Statistics, The Wharton School, University of Pennsylvania
448 Jon M. Huntsman Hall, Philadelphia, PA 19104
ajw@stat.wharton.upenn.edu
Citizenship: United States
Education
Stanford University, Stanford, CA. Ph.D., Statistics, June 1993. Advisor: Ani Adhikari.
Yale University, New Haven, CT. BS, Mathematics, May 1988. Graduated magna cum laude,
with distinction in the major.
Academic Employment
Wharton School, University of Pennsylvania, Philadelphia, PA. Full Professor of Statistics,
July 1, 2013. Chair, Undergraduate Program in Statistics.
Wharton School, University of Pennsylvania, Philadelphia, PA. Associate Professor of
Statistics, September 2005-2013. Chair, Undergraduate Program in Statistics.
Wharton School, University of Pennsylvania, Philadelphia, PA. Assistant Professor of
Statistics, September 1998-2005.
University of California at Berkeley, Berkeley, CA. Visiting Assistant Professor of Statistics,
September 1995- June 1998.
Stanford University, Stanford, CA. Acting Assistant Professor of Statistics, September 1993June 1995.
Non-Academic Employment
IBM Thomas J. Watson Research Center, Yorktown Heights, NY. Research Associate,
Speech Recognition Group. June 1989-August 1989.
AT&T Bell Laboratories, Murray Hill, NJ. Consultant, Data Compression Lab. June 1987present.
Statistical Consulting Services

(2012-present)
Blue Man Group Holdings. Provided statistical expertise on accounting matters and
survey design. May 2013.
Berger & Montague, P.C. Expert report and deposition. Miriam Haskins et. al. v.
First American Title Insurance Co. November 2012- May, 2013.
DII Investment Trust. Statistical modeling and consulting. November 2011- Present.
NYC Police Department. Expert report. Carmichael v. City of New York et al. July,
2012.
Tycko & Zavareei LLP. Expert report. June, 2012.
Kramer, Levin, Frankel and Naftalis LLP. Expert services. U.S. v. Chad Elie & John
Campos, et al. May, 2012.
Paul, Weiss, Rifkind, Wharton & Garrison LLP. Expert report and deposition,
Bermanger et. Al. vs. CGM et al. April 2012. Client: Citigroup.
Paul, Weiss, Rifkind, Wharton & Garrison LLP. Expert consulting for advertising
arbitration involving Castrol. January, 2012.
Awards
National Science Foundation (NSF) Post-Doctoral Fellowship in the Mathematical

Sciences, 1995-1998
National Science Foundation Fellowship, 1989-1991
Hertz Foundation Award, 1988
Abrams Award, Stanford Statistics Department, 1988
Anthony D. Stanley Prize for Excellence in Mathematics, 1988
Professional Activities
Member of NSF statistics expert panel 2003. Referee for NSF grant proposals, Israel-US BiNational Science Foundation. Referee for numerous articles in many journals including the
Annals of Statistics, IEEE Transactions on Information Theory, Machine Learning, Annals of
Probability, Annals of Applied Probability, Journal of Computational Biology, Computer
Journal, Journal of Information Retrieval, Statistical Science, Annals of Applied Statistics,
Geographical Review Letters, NIPS, AI-Stats, Proceedings of Information Theory Symposium
(also on Programming Committee).
Refereed Publications1
(*denotes alphabetical ordering)
1. Mathieu E. Wimmer, Justin Rising, Raymond J. Galante, Abraham Wyner, Allan I. Pack,
Ted Abel , Aging in Mice Reduces the Ability to Sustain Sleep/Wake States, PloS one
8 (12), e81880, December, 2013.
2. McShane, Blakely B.; Jensen, Shane T.; Pack, Allan I.; Wyner, Abraham J. Modeling
Time Series Dependence for Scoring Sleep in Mice. Journal of the American Statistical
Association, 108 (504), 1147-1162, 2013.
3. McShane, Blakely B.; Jensen, Shane T.; Pack, Allan I.; Wyner, Abraham J. Rejoinder:
Modeling Time Series Dependence for Scoring Sleep in Mice. Journal of the American
Statistical Association, 108 (504), 2013.
4.
Driver, R. J., Lamb, A. L., Wyner, A. J., & Raizen, D. M. "DAF-16/FOXO Regulates
Homeostasis of Essential Sleep-like Behavior during Larval Transitions in C. elegans."
Current Biology (2013).
5. Hu FY, Hanna GM, Han W, Mardini F, Thomas SA, Wyner AJ, Kelz MB, Hypnotic
Hypersensitivity to Volatile Anesthetics and Dexmedetomidine in DopamineHydroxylase Knockout Mice. Anesthesiology. Accepted for Publication, November
2012.
6. Hu FY, Hanna GM, Han W, Mardini F, Thomas SA, Wyner AJ, Kelz MB, Hypnotic
Hypersensitivity to Volatile Anesthetics and Dexmedetomidine in DopamineHydroxylase Knockout Mice. Anesthesiology. Accepted for Publication, November
2012.
7. *Rising, Justin and Wyner, Abraham. Partial Kelly Portfolios and Shrinkage
Estimators. IEEE International Symposium on Information Theory Proceedings, July
2012.
Including articles, discussions and rejoinders in refereed journals and refereed conference
proceedings.
8. Naidoo, N., Ferber M., Galante, R.J., McShane, B.B., Hu, J.H., Zimmerman, J., Maislin,
G., Cater, J., Wyner, A. J., Worley, P., and Pack, A.I., Role of Homer Proteins in the
Maintenance of Sleep-Wake States. PLoS ONE Genetics, 2012, 7(4): e35174, 2012.
9. McShane, BB; Galante, RJ; Biber, M; Jensen, ST; Wyner, AJ; Pack, AI. Assessing
REM Sleep in Mice Using Video Data. SLEEP; 35(3):433-442, 2012.
10. Pick, Jeremy; Chen, Yihan; Moore, Jason T; Sun, Yi; Wyner, Abraham J.; Friedman,
Eliot B; Kelz, Max B. Rapid Eye Movement Sleep Debt Accrues in Mice Exposed to
Volatile Anesthetics. Anesthesiology: Volume 115 - Issue 4 - p 702712, 2011.
7. *McShane, B.B. and Wyner, A.J. Rejoinder: A Statistical Analysis of Multiple
Temperature Proxies: Are Reconstructions of Surface Temperatures over the Last 1000
Years Reliable? The Annals of Applied Statistics, Vol. 5, No. 1, 99123, 2011.
8. *McShane, B.B. and Wyner, A.J. A Statistical Analysis of Multiple Temperature
Proxies: Are Reconstructions of Surface Temperatures over the Last 1000 Years
Reliable? The Annals of Applied Statistics, Vol. 5, No. 1, 544, 2011.
9. Blakeley B. McShane, Raymond J. Galante, Shane T. Jensen, Nirinjini Naidoo, Allan I.
Pack*, and Abraham Wyner * (*Co-Senior authors), Characterization of the Bout
Durations of Sleep and Wakefulness. Journal of Neuroscience Methods 193, 321333,
2010.
10. *Jensen, S.T., McShane, B.B and Wyner, A.J. Rejoinder: Hierarchical Bayesian
modeling of hitting performance in baseball. Bayesian Analysis, pp. 669674, 2009.
11. *Jensen, S.T., McShane, B.B., and Wyner, A.J. Hierarchical Bayesian modeling of
hitting performance in baseball. Bayesian Analysis 4, pp. 631652, 2009.
12. *Jensen, S.T, Shirley, K.E., and Wyner, A.J. Bayesball: A Bayesian Hierarchical Model
for Evaluating Fielding in Major League Baseball. The Annals of Applied Statistics, Vol.
3, No. 2, 491520, 2009.
13. *Bradlow, E., Jensen, S., Wolfers, J. and Wyner, A. A Statistical Look at Roger
Clemens Pitching Career. Chance, Vol. 21, No. 3, 2430, 2008.
14. *D. Mease, A. Wyner. Evidence Contrary to the Statistical View of Boosting. Journal
of Machine Learning Research, 9 131-156, 2008.
15. *D. Mease, A. Wyner. Evidence Contrary to the Statistical View of Boosting: A
Rejoinder to Responses. Journal of Machine Learning Research, 9 195-201, 2008.
16. Mease, D., Wyner, A.J. and Buja, A., Boosted Classification Trees and Class
Probability/Quantile Estimation. Journal of Machine Learning Research, 8 (Mar): 409-439, 2007.
17. *Buja, A., Mease, D. and Wyner, A.J. Comment: Boosting Algorithms: Regularization,
Prediction and Model Fitting. Statistical Science, Vol.22, No. 4, 506-512, 2007.
18. *Belentepe, C., Wyner, A.J. A Statistical View of Universal Stock Market Portfolios.
Proceedings of the 2005 International Symposium on Information Theory, Adelaide,
Australia, September, 2005.
19. *Ferrari, F. and Wyner, A.J., Estimation of General Stationary Processes by Variable
Length Markov Chains. Scandinavian Journal of Statistics, Vol. 30, pp. 459-480,
September, 2003.
20. Wyner A.J., On Boosting and the Exponential Loss. in C. M. Bishop and B. J. Frey
(eds), Proceedings of the Ninth International Workshop on Artificial Intelligence and
Statistics, Jan 3-6, Key West, FL. 2003.
21. *Foster, D., Stine, B. and Wyner, A.J., Universal Codes for Finite Sequences of Integers
Drawn from a Monotone Distribution. IEEE Transactions on Information Theory,
Volume: 48 Issue: 6, pp. 1713 -1720, June 2002.
22. *Krieger, A., Long, C., and Wyner, A.J., Boosting Noisy Data. C. Brodley, A. P.
Danyluk (Eds.): Proceedings of the Eighteenth International Conference on Machine
Learning , Williams College, Williamstown, MA, USA, June 28 - July 1, 2001. Morgan
Kaufmann, pp. 274-281, 2001.
23. *Friedman, N., Goldszmidt, M., and Wyner, A.J., Data Analysis with Bayesian
Networks: A Bootstrap Approach. Proceeding of the Fifteenth Conference on
Uncertainty in Artificial Intelligence, pp. 196-205. Morgan Kaufmann, San Francisco,
1999.
24. *Friedman, N., Goldszmidt, M. and Wyner, A.J., On the Application of the Bootstrap
for Computing Confidence Measures on Features of Induced Bayesian Networks.
Artificial Intelligence and Statistics: Proceeding of the Seventh International Workshop
on Intelligence and Statistics, pp. 197-202. Morgan Kaufmann, San Francisco, 1999.
25. Wyner, A.J., More on Recurrence and Waiting Times. The Annals of Applied
Probability, Vol. 9, No. 3, pp. 780-796, 1999.
26. *Buhlmann, P. and Wyner, A.J., Variable Length Markov Chains. The Annals of
Statistics, Vol. 27, No. 2, pp. 480-513, 1999.
27. Wyner, A.D., Ziv. J. and Wyner, A.J., On the Role of Pattern Matching in Information
Theory. IEEE Transactions on Information Theory, Vol. 44, no. 6, pp. 2045-2056,
October, 1998.
28. Kontoyiannis, I., Algoet, P.H., Suhov, M. and Wyner, A.J., Nonparametric Entropy
Estimation for Stationary Processes and Random Fields, with Applications to English
Text. IEEE Transactions Information Theory. Vol. IT-44, pp. 1319 - 1327, May, 1998.
29. Wyner, A.J., The Redundancy and Distribution of the Phrase Lengths of the FixedDatabase Lempel-Ziv Algorithm. IEEE Transactions of Information Theory, Vol. IT-43,
pp. 1452 - 1464, September 1997.
30. *Wyner, A.D., and Wyner, A.J., Improved Redundancy of a Version of the Lempel-ZivAlgorithm. IEEE Transactions on Information Theory, Vol. IT-41, pp. 723 731, May,
1995.
31. *Farach, M., Noordewier, N., Sevari, S., Shepp, L., Wyner, A.J., and Ziv, J., On the
Entropy of DNA: Algorithms and Measurements based on Memory and Rapid
Convergence. Proc AC-SIAM, Symposium on Discrete Algorithms (SODA)},
Philadelphia, PA, pp. 48-57. 1995.
32. *Plotkin, N. and Wyner, A.J., An Entropy Estimator Algorithm and
Telecommunications Applications. G.R. Heidbreder (ed.), Maximum Entropy and
Bayesian Methods, 351-363. Kluwer Academic Publishers. Santa Barbara, CA, 1993. The
Netherlands, 1996.
Papers Submitted to Refereed Journals

33. Wyner, A.J. and Foster, D., On the Lower Limits of Entropy Estimation. Entropy, ReSubmitted October 2013.
Non-Refereed Publications
(*denotes alphabetical ordering)
34. Wyner, Abraham. A Statistician Reads the Sports Pages: Can the Skill Level of a Game
of Chance Be Measured? Shane Jensen (column editor) Chance, Vol. 25.3, 2012.
35. *Bradlow, E., Jensen, S., Wolfers, J. and Wyner, A. Keeping Score: Report Backing
Clemens Chooses Its Facts Carefully. New York Times, February. 10, 2008.
36. Wyner, Abraham. Why Do Womens Salaries Still Lag Behind? The Forward,
December 20, 2013.
Book Chapters
37. Wyner, A.D., J. Ziv and Wyner, A.J., On the Role of Pattern Matching in Information
Theory. Information Theory: Fifty Years of Discovery, S. Verdu and S. McLaughlin,
editors. IEEE Press, Piscataway, NJ. 2000.
Originally appeared in [27].
Working Papers
38. Wei Han, Max Kelz and Abraham Wyner. Continuous Segmental Best Fit Analysis
using Approximate Entropy.
39. Lawrence Shepp, Phillip Ernst and Abraham Wyner, On the alleged correlation of
uncorrelated processes.
Grants and Contracts

1. ESPN Baseball Project: Received a $ 50K grant from ESPN to study baseball. This grant
will fund a large collaboration with several statisticians in our department (Shane Jensen,
Dylan Small), graduate students and professors from outside the department.
2. Mechanisms of Alterations in Sleep with Age. Multi-million dollar program project grant
will be funded by National Institute on Aging. It will provide 5 years of summer support for
a collaboration with the Sleep Center at the University of Pennsylvania. Approved June,
2006.
3. NIH PhD Training Grant: This grant will provide full time support for a statistics PhD
student beginning from Fall 2007 through 2014.
4. SBIR Grant to NIH High Throughput Phenotyping of Mouse using Video. This grant
proposal submitted in January and approved for funding in March will provide 40K of
funding to develop a collaboration with small business partner NeuroCare to explore the
commercialization our newly developed technology.
5. Mechanisms of Alerations in Sleep with Age (renewal). Mutlimillion program program
projet grant. Approved Feb, 2013.
6. Patent Proposal: we are in the process of patenting this technology.
Doctoral Students: Thesis Advisees

1. Chuan Long, Ph.D. Statistics, 2001.
2. Cengiz Belentepe, Ph.D. Statistics, 2005.
3. Blakeley McShane, Ph.D. Statistics, 2010.
4. Justin Rising, PhD. Candidate Department of Statistics, 2013
5. Wei Han, PhD Candidate, Department of Applied Mathematics, 2013 (co-advisor with
Alexander Rakhlin).
6. Joshua Magarick, PhD. Candidate Department of Statistics, 2015
Wharton Service
Director of the Undergraduate Program in Statistics (2005-present).
MBA Faculty cohort Advisor (2003-2007).
Member of Executive Committee (2003-2004).
Faculty advisor to Wharton Gaming Club (2002-2003).
Invited Presentations
Presented technical talks at conferences and universities around the world, including:
Universities:
Stanford University, University of California Berkeley, University of Southern California,
University of Chicago, Yale University, Columbia University (Statistics), Rutgers
University, Hebrew University (CS), Carnegie-Mellon, Weizmann Institute, Technion, Tel
Aviv University, ETH-Zurich.
Conferences:
Workshop on Information Theory and Applications, International Conference on
Complexity, DIMACS, International conference on Neural Information and Processing
Systems Workshop, IEEE International Workshop of Information Theory, International
Conference on Mathematics and Information Theory, Conference on Information Science
and Systems, International Symposium on Information Theory, Mid-West Statistical Society
Conference, Harvard University Statistical Research Conference, Joint Statistical Meetings,
Wharton Sports Business Initiative Conference.
Teaching Experience
Undergraduate: Intro. Statistics, Introduction to Statistics for Social Scientists and

Economics Majors, Introduction to Statistics to Wharton students, Probability Theory.
Undergraduate Preceptorial: Gambling and Probability (2001-2003).
Graduate: Stochastic Processes with Applications (for OR Ph.D. students), Probability

(statistics Ph.D. students), Stochastic Processes (for Ph.D. students), Seminar in Advanced
Topics in Statistics and Information Theory. Statistics and the Law.
MBA: Statistics for Managers (core courses: Stat 611, 612, 603, 621).
MBA Independent Study: Vik Kakkar, Jackie Pangilinan, Brooks Powlen, Clint
Siegfried, Timothy Skender (Sports Research).
Undergraduate Independent Study and Research (since 2005):

1. Andrew Yang (Sequential Prediction).
2. Dan Short (Gambling/Basketball).
3. Matt Kozim, Matt Corruth, Elan Fuld, Charlie Boatwright, Julie Kandel-Krieger,
Sam Mondry-Cohen (Baseball Research).
4. Michael Olivares, Sydney Scott (Psychology).
5. Divya Krishnan Danish Munir (Financial Engineering).
6. Tamara Pier.
EXHIBIT 0
DraftKings,
Are Uber to CLERK
Casinos Eyeing
Sports Bets -11:42
Bloomberg
Business
FILED:
NEW FanDuel
YORK COUNTY
11/17/2015
AM
NYSCEF DOC. NO. 16
INDEX NO. 453054/2015

1
DraftKings, FanDuel Are Uber to Casinos

Eyeing Sports Bets
Christopher Palmeri
October 1, 2015 5:00 AM EDT Updated on October 1, 2015 12:48 PM EDT
Biggest companies see risk to gaming licenses in new business

Upstart competitors raise $575 million, shower TV with ads
At the casino industrys biggest trade show this week in Las Vegas, the hottest topic is a growing business
thats left major players like MGM Resorts International out of the action: fantasy sports.
The two leaders, DraftKings Inc. and FanDuel Inc., raised a total of $575 million in July from investors
including KKR & Co., 21st Century Fox Inc. and Major League Baseball to attract players to games that pay
out millions of dollars in cash prizes in daily contests. Casino executives interviewed during the G2E Global
Gaming Expo said the murky legal status of fantasy sports and rules set down by state authorities prevent the
companies from joining in.
I would like to know how it is were going to address this issue on a national level, said Jim Murren,
chairman and chief executive officer of MGM. Its extraordinarily ambiguous now.
The explosion of fantasy sports, where fans choose players from real-life leagues and pay for a chance to win
money, is a growing frustration for the casino industry. Customer spending may reach $17.7 billion by 2020,
from $3.7 billion this year, according to Eilers Research LLC. The casinos core business of slot machines and
blackjack is seeing lackluster growth, and owners have struggled to expand into new areas. Local or federal
law restricts their ability to offer online gambling and sports betting.
In the meantime, unregulated fantasy sports companies are free to shower TV networks with ads. In Las
Vegas, G2E attendees arriving at McCarran International Airport were greeted by DraftKings banners offering
a week of free play and boasting that someone wins $1 million every week.
http://www.bloomberg.com/news/articles/2015-10-01/casinos-seek-piece-of-fast-growing-fantasy-sports-m...
DraftKings, FanDuel Are Uber to Casinos Eyeing Sports Bets - Bloomberg Business
State regulators license casino operators and decide what games they can offer. They also monitor the
companies behavior outside their state boundaries -- which effectively handcuffs operators from moving into
new lines when the rules arent clear.
Casino executives gripe that the leagues object to sports betting, yet have their hand in the fantasy pie. The
NFL Network, owned by the National Football League, airs a show on the topic and runs its own service, for
example. It doesnt take money or offer prizes.
But the league doesnt allow its broadcast partners to run casino ads during games. The NFL and other leagues
successfully sued last year to prevent New Jersey from offering sports betting in casinos. A congressman from
the state has called for hearings.
The NFL is being exposed as hypocritical, said Tim Wilmott, chief executive officer of Penn National
Gaming Inc., a casino owner based in Wyomissing, Pennsylvania. Lawmakers are starting to look at this and
say, why is this different?
Officials from the American Gaming Association, which represents gaming companies, met with attorneys
general from seven states on Monday to discuss the status of sports betting and non-traditional forms of
wagering. The Washington-based group is expected to announce its position on sports betting in November,
according to Sara Rayme, director of public affairs for the group.
Brian McCarthy, a spokesman for the NFL, said teams are barred from investing directly in fantasy sports,
although team owners can, and ads for Las Vegas tourism are allowed during telecasts. The Kraft Group,
owner of the New England Patriots, is an investor in Boston-based DraftKings.
Fantasy sports are considered legal, McCarthy said in an e-mail. Major League Baseball takes the same
position.
Not all state regulators agree. Michigan is studying whether its criminal gambling laws apply to fantasy sports,
said Mary Kay Bean, a spokeswoman for the state Gaming Control Board.
DraftKings, FanDuel Are Uber to Casinos Eyeing Sports Bets - Bloomberg Business
At a G2E seminar, DraftKings CEO Jason Robins downplayed the connection between fantasy sports and
gambling, saying only 15 percent of his customers actually bet on sports. He likened the business to chess or
investing in the stock market. He declined to take questions after his appearance.
The company doesnt accept payments in several states where its status isnt clear, including Montana,
Louisiana, Arizona, Iowa and Washington, according to a statement.
Fantasy sports are fundamentally different than traditional sports betting, Justine Sacco, a spokeswoman for
New York-based FanDuel, said in an e-mailed statement.
Fantasy sports contests are contingent on the positive performance of all of their players -- with trillions of
possible outcomes, Sacco said. No one could try to fix a fantasy contest for their own objectives.
The casino companies, for their part, will keep looking for a way in.
Some people think this industry will always be cherries and triple 7s and green felt, said Geoff Freeman, the
associations president. If thats all you see, youll drive it into the ground.
Before it's here, it's on the Bloomberg Terminal.
DraftKings Inc Sports FanDuel Inc Fantasy Sports Uber Technologies Inc Tech Las Vegas
Police made 23 arrests in overnight raids, minister says

French warplanes bombed IS positions in Syria Sunday night
EXHIBIT P
INDEX NO. 453054/2015

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v
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rsResea
rch
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16o
f36
Da
i
lyFan
tasySpo
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is
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rch
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17o
f36
Da
i
lyFan
tasySpo
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tsApp
leiPhoneDown
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iO
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Down
load
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s

(Un
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ted

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ta
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-
Spo
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C
a
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go
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On
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18o
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I
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14Bo
ld(Mos
t
lyBu
l
l
ish
)P
red
ic
t
ionsabou
ttheFu
tu
reo
fDFS
P
resen
tedasaCoun
tdown.
No
te:thesea
reno
tou
rbase
l
ineexpec
ta
t
ions
,ra
the
rsomeposs
ib
i
l
i
t
iesove
rthe
nex
t3
-5yea
rs(wewou
ldexpec
ta
tleas
tafewp
red
ic
t
ionstocometof
ru
i
t
ion
)
.
19o
f36
TheFu
tu
reo
fDFS
:Bo
ldP
red
ic
t
ion#14
Ma
rke
ts
ize
: en
t
ryfeeson Da
i
lyFan
tasySpo
r
tsexceedstheto
ta
lamoun
t
wage
redonSpo
r
tsina
l
lo
fNevadaby2016
.
D
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En
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C
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C
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En
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Fe
e
s
on
DF
S

(
E
i
l
e
r
s
R
e
s
ea
r
c
h
b
a
s
e
l
ine
p
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c
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)
C
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Spo
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in
NV
Sou
rce
:NV Gam
ingCon
t
ro
lBoa
rd
,E
i
le
rsResea
rch
,LLC
20o
f36
TheFu
tu
reo
fDFS
:Bo
ldP
red
ic
t
ion#13
FanDue
l
:f
i
lesfo
ranIPOinea
r
lyCY16
,p
red
ic
tsen
t
ryfeeso
fove
r$2
.5b
ln
fo
rthe upcom
ing yea
r
, dea
lis ove
rsubsc
r
ibed and company beg
ins
t
rad
ingonNASDAQ w
i
thva
lua
t
iono
f$2b
ln+
.
21o
f36
TheFu
tu
reo
fDFS
:Bo
ldP
red
ic
t
ion#12
Regu
la
to
ryenv
i
ronmen
timp
roves
: weexpec
ta
tleas
tones
ta
te whe
rethe
lawisunc
lea
ro
rques
t
ionab
leabou
tlega
l
i
ty(
i
.e
.A
r
izona
,Iowa
,Lou
is
iana
,
Mon
tana o
r Wash
ing
ton
)toa
l
low DFScash games w
i
th
inthe nex
t12
-24
mon
ths
.
DFS($
)w
i
l
ll
ike
lybeava
i
lab
leineve
ryUSS
ta
te w
i
th
inthenex
t5
-yea
rs
22o
f36
TheFu
tu
reo
fDFS
:Bo
ldP
red
ic
t
ion#11
Theb
igges
tr
iskfo
r DFSindus
t
ryisNOT regu
la
t
ion
,bu
t whe
the
ri
tcana
t
t
rac
t
mass ma
rke
tappea
landavo
idbecom
ingtooha
rdco
re
. Name
ly
,FD
/DKrun
ther
isk o
f becom
ing ove
rrun by a
lgo
s & quan
ts
, wh
ich cou
ld p
rec
lude
indus
t
ryf
rom eve
r pene
t
ra
t
ing mass ma
rke
t and ach
iev
ing ou
r revenue
p
ro
jec
t
ions
. Ve
ry de
l
ica
te ba
lancetha
t needsto be ma
in
ta
ined be
tween
g
r
inde
rsandcasua
lp
laye
rsasindus
t
ry ma
tu
res
.
23o
f36
TheFu
tu
reo
fDFS
:Bo
ldP
red
ic
t
ion#10
NFLInves
tmen
t
: A
f
te
r cons
ide
rab
le deba
tethe NFL dec
ides on ajo
in
t
inves
tmen
t in
to bo
th FanDue
l & D
ra
f
tK
ings ra
the
r than an exc
lus
ive
pa
r
tne
rsh
ip
. DFS compan
ies see d
im
in
ish
ing re
tu
rns f
rom sponso
r
ing
ind
iv
idua
lNFLteams&p
laye
rs
.
24o
f36
TheFu
tu
reo
fDFS
:Bo
ldP
red
ic
t
ion#9
TVra
t
ingssu
rge
:
TVra
t
ingsfo
r DFStou
rnamen
tsbeg
intosoa
rin CY17 &su
rpassWo
r
ld
Se
r
ieso
fPoke
r(WSOP
)v
iewe
rsh
ip
.NewESPNrea
l
i
tyTVse
r
iesTheRea
l
Meno
fDa
i
lyFan
tasySpo
r
ts.
NBAregu
la
r season TVra
t
ings beg
into s
tead
i
lyinc
rease and h
i
t new
h
ighsin CY18as DFShe
lpsd
r
iverenewedin
te
res
t(somepa
ra
l
le
lsto wha
t
seasonlongfan
tasyd
idfo
rNFL
)
.
NBA

re
gu
la
r

sea
son

ra
t
in
g
s

on

n
e
two
r
k

TV
6
.
0
5
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to

he
lpr
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ve
NBA

TV

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a
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in
g
s
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4
.
0
3
.
0
2
.
0
1
.
0
NBA

r
egu
l
a
r

s
ea
son

r
a
t
in
g
s
on
ne
two
r
k

TV
Sou
rce
:N
ie
lsen
,E
i
le
rsResea
rch
,LLC
25o
f36
TheFu
tu
reo
fDFS
:Bo
ldP
red
ic
t
ion#8
Theg
lo
rydays
:2013
-2015 w
i
l
ll
ike
lyberemembe
redasthehey
-dayfo
r DFS
f
romap
laye
rpe
rspec
t
iveduetola
rgeove
r
layoppo
r
tun
i
t
iesandno
t
iceab
le
sk
i
l
lgapbe
tweeng
r
inde
rsandcasua
l
. Th
is w
i
l
lno
tlas
tasthe ma
rke
t
becomes mo
ree
f
f
ic
ien
t
.
Sou
rce
:Ro
tog
r
inde
rs
,E
i
le
rsResea
rch
,LLC
26o
f36
TheFu
tu
reo
fDFS
:Bo
ldP
red
ic
t
ion#7
No
ta
l
lpub
l
ic
i
tyisgoodpub
l
ic
i
ty
: w
i
th
inthenex
t18 mon
thstheDFSindus
t
ry
w
i
l
ll
ike
lyfaceone ma
jo
rPRf
iascoth
iscou
ldrangef
romthefo
l
low
ing
:
Secu
r
i
ty/Da
tab
reach
Chea
t
ingscanda
lina ma
jo
r GPP
Po
l
i
t
ica
la
t
tack
Paymen
tre
fusa
l/Sobs
to
ry
Roguecompanypushesthelega
lbounda
r
ies
Consume
rl
i
t
iga
t
iona
t
tack
Theab
i
l
i
tyfo
rindus
t
rytoove
rcometh
iseven
t
(s
)w
i
l
lbekeyinte
rmso
ffu
tu
re
g
row
thandi
tw
i
l
lfu
r
the
runde
rm
inetheimpo
r
tanceo
ftheFSTA
!
27o
f36
TheFu
tu
reo
fDFS
:Bo
ldP
red
ic
t
ion#6
Does B
ig Med
iage
tinvo
lvedin DFS?
:(
t
r
ickques
t
ion
)
,theya
rea
l
readyinthe
space
:
ESPN
,Fox
,CBS
,NBCa
rea
l
l ma
jo
rbene
f
ic
ia
r
ieso
fthesubs
tan
t
ia
ladspendbyFD&DK
.
Comcas
tVen
tu
resandNBCSpo
r
ts G
roupa
reex
is
t
ingequ
i
tyho
lde
rsinFanDue
l
.
Spo
r
tsI
l
lus
t
ra
ted(ownedbyT
ime
)launchedFanNa
t
ion(Baseba
l
lDFS
)las
tyea
r
.
IAC
/
In
te
rac
t
iveCo
rpownedD
ra
f
tS
t
ree
tbe
fo
rese
l
l
ingi
ttoD
ra
f
tK
ings(
las
tyea
r
)
.
NBCSpo
r
tsacqu
i
redRo
toWo
r
ldlas
tyea
r
.
Facebook(whoisa
lsohe
retoday
!
)isbecom
inginc
reas
ing
lyinvo
lvedv
iata
rge
tedadve
r
t
is
ing/
mob
i
leappdown
loads
,wh
i
le Goog
leisbene
f
i
t
ingf
romkeywo
rdsea
rches
.
Sothe Ques
t
ionbecomesdoanyb
ig med
iacompan
iesdec
idetoope
ra
tea
DFSs
i
ted
i
rec
t
ly(B2C
)o
r makea ma
jo
racqu
is
i
t
ion?
Two mos
tl
ike
lycompan
ieswou
ldbeESPN(ownedbyD
isney
)andYahoo
.
Compe
l
l
inga
rgumen
tscanbe madefo
r/aga
ins
ten
te
r
ingthespace
,bu
tou
rp
red
ic
t
ion
:wew
i
l
lno
t
seee
i
the
rcompanylaunchas
tanda
lone DFSs
i
te(pa
r
tne
rsh
ip
,inves
tmen
ts
, wh
i
te
labe
lso
lu
t
ion
poss
ib
le
)inthenex
t12
-mon
ths
.
28o
f36
TheFu
tu
reo
fDFS
:Bo
ldP
red
ic
t
ion#5
M&A
: rema
ins a p
reva
len
ttheme
, we be
l
ieve a
tleas
t one o
fthefo
l
low
ing
scena
r
iosoccu
rsinthenex
t1
-3yea
rs
.
Poss
ib
le M&Ascena
r
ios(
ino
rde
ro
fl
ike
l
ihood
):
1
.D
ra
f
tK
ings&FanDue
lacqu
i
resma
l
le
rDFSs
i
tes
.
r
ty
.
2
.D
ra
f
tK
ingsge
tsacqu
i
redbya3rd pa
r
ty
.
3
.FanDue
lge
tsacqu
i
redbya3rd pa
4
.FanDue
l&D
ra
f
tK
ings me
rge
.
29o
f36
TheFu
tu
reo
fDFS
:Bo
ldP
red
ic
t
ion#4
Changesinthe bus
iness mode
l
: the unde
r
ly
ing mode
lfo
r DFSisla
rge
ly
bo
r
rowedf
romtheon
l
inepoke
r wo
r
ldandr
ipefo
rinnova
t
ion
, wh
ichshou
ld
leadtonewsuccess
fu
len
t
ran
ts
.
Bo
th FanDue
l&D
ra
f
tK
ings shou
ld beg
into expe
r
imen
tw
i
th newrevenue
mode
lsandf
igu
r
ing ou
t waysto mone
t
izela
rge & g
row
ing use
r base
.A
lso
howdoyoua
t
t
rac
t mo
reFema
lep
laye
rs
!
!
!?(
I
fyoucanf
igu
retha
tou
t=$$$
)
Examp
le
:ThePowe
ro
fF
ree
to
-P
lay(F2P
)
Re
gu
l
a
ted
U
.
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.

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So
c
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C
a
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ino
C
Y1
4E
Sou
rce
:NJDGE
,NVCon
t
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lBoa
rd
,DELo
t
te
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,CompanyRepo
r
ts
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rea
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s
revenuesth
isyea
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.
30o
f36
TheFu
tu
reo
fDFS
:Bo
ldP
red
ic
t
ion#3
Socce
r& O
the
r Spo
r
ts
: DFSbeg
instoga
inawa
renessin Eu
ropeasFan
tasy
Socce
r beg
insto ga
int
rac
t
ion/ m
indsha
reandsome DFScompan
ies beg
in
sponso
r
ing ma
jo
rsocce
rc
lubs(MondoGoa
lhasa
l
readybegundo
ingth
is &
recen
t
ly pa
r
tne
red w
i
th FC Ba
rce
lona
!
)
.A
lso expec
to
the
r popu
la
r spo
r
ts
(ou
ts
ide o
f US
)to ga
int
rac
t
ioninc
lud
ing
:C
r
icke
t
, Rugby
, and Fo
rmu
la 1
Rac
ing
.
31o
f36
TheFu
tu
reo
fDFS
:Bo
ldP
red
ic
t
ion#2
Spo
r
ts wage
r
ing
: lega
l
ized spo
r
ts wage
r
ing ou
ts
ide o
f Nevada becomes a
rea
l
i
tyby CY20andleadstoanewiGam
ing waveas mu
l
t
ip
les
ta
tesbeg
into
o
f
fe
r mob
i
le spo
r
ts wage
r
ing
. Desp
i
te conce
rns o
f cann
iba
l
iza
t
ion DFS
indus
t
rycon
t
inuestoth
r
ive
.
Oneo
ftheg
rea
tes
tadvan
tagestha
tDFShas
ove
rSpo
r
tsbe
t
t
ingisthe GPP
;i
t
sk
indo
fl
ike
aspo
r
tsbe
t
t
ingpa
r
layonS
te
ro
ids
(Tay
lo
rCaby
,fo
rme
rCEO
/Founde
ro
fD
ra
f
tDay
)
32o
f36
TheFu
tu
reo
fDFS
:Bo
ldP
red
ic
t
ion#1
AdamK
re
jc
ik w
insthe M
i
l
l
iona
i
re Make
ronD
ra
f
tK
ings
!
(Jus
tk
idd
ing
,bu
thope
fu
l
lyIcanone
-dayf
in
ishinthetop10o
fa ma
jo
r GPP
tou
rnamen
t
)
33o
f36
Summa
ry
DFSiss
t
i
l
la n
icheindus
t
ry
, bu
tg
row
ingrap
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EXHIBIT Q

NYSCEF DOC. NO. 40
INDEX NO. 453054/2015

EXHIBIT R

NYSCEF DOC. NO. 41
INDEX NO. 453054/2015

EXHIBIT S

11/16/2015
INDEX NO. 453056/2015
UsingVegasLinestoHelpYouSucceedinDailyFantasyBaseball
NYSCEF DOC. NO. 13
FanDuel Insider
MLB
Using Vegas Lines to Help You Succeed in Daily Fantasy Baseball

by David Gonos
Aug 04 9:16am
Understanding that playing daily fantasy baseball on FanDuel is a great way to enjoy the
game, but its also good to know different ways to help you win! Nobody wants to play just to
go through the work of research and end up losing. Entertaining or not, its just not as good as
winning!
In that vein, were going to talk about using Vegas lines to help your FanDuel MLB teams this
summer. Its like using a weighted bat doughnut to improve your bat speed. In fact, its just like
that.
But why use Vegas lines at all? Are those numbers safe to rely on? Arent they wrong just as
often as they are right?
The reason we rely on Vegas lines is because theyre the best publicly available source of
quickly understandable statistical analysis. They save all of us hundreds of hours of research
every day. There will always be anomalies and streaks that buck trends and analysis, but for
the most part, Vegas is usually closer to the mark than everyone else. They didnt build those
fancy hotels by losing, did they?
Youll see many lines posted on sportsbook websites and even some major sports news
websites, too. Well break down some of the components of the Vegas lines and how they can
help your FanDuel lineups.
Money Lines
A money line is the number a bettor would win if they wagered $100. While that doesnt apply
on FanDuel games, it is correlated to a baseball teams projected chances of winning or
https://www.fanduel.com/insider/2015/08/04/using-vegas-lines-to-help-you-in-daily-fantasy-baseball/
1/5
11/16/2015
on FanDuel games, it is correlated to a baseball team

teamss projected chances o
of winning or
NowAnd if you can get a good idea of which team is expected to win a game,
losing Play
a game.
FanDuel that will also

then that means youll have a better chance of choosing a pitcher on FanDu
have a great chance to win. As you know, wins are king in FanDuel scoring because a pitchers
win counts for four points which negates four earned runs and is the equivalent to four
strikeouts or four innings pitched.
To illustrate, a team with a -200 money line basically has a 2-to-1 chance of winning that days
game, and their opponent basically has the opposite chances of winning. The starting pitcher
would then be someone to consider for FanDuel depending on his price, of course. Just
because hes favored to win doesnt mean you pay an ultra-high salary for him. You still have
to judge his value against the other pitchers on that days slate.
Obviously, the pitcher on the other end of that money line if its a big one is not someone
to consider outside of GPP tournament play. We say that because in tournaments, you often
will want a player everyone else including Vegas might be going against. But even then,
the bad end of a big money line is a big loser more often than not.
Remember, youre looking for the largest negative numbers you want pitchers that are
heavily favored to get a win in order to better your chances of getting four points.
But this is only the beginning of your FanDuel pitcher research. Make note of the obvious
favorites, guys like Max Scherzer, Clayton Kershaw and David Price, but youll also want to see
which of the medium-grade pitchers have surprisingly high money lines. You might find the
better value among them.
Over/Under Totals
The folks in Vegas are also kind enough to share their estimations on what the total runs
scored will be in each baseball game that day. In other words, theyve gone through the data
on the pitchers and the hitters of each club, considered the stadium and the weather, and
theyve determined that X number of runs will cross home plate.
In Vegas, bettors try to decide if the total runs scored will be over or under the number.
Thankfully, FanDuel players dont have to do that and they still get all the benefits of Vegas
research.
2/5
11/16/2015
UsingVegasLinestoHelpYouSucceedinDailyFantasyBaseball
Consider the over/under line alongside the money lines for pitchers, and you can get a pretty
good idea of what each team is expected to score.
Lets say 7.5 runs is the average over/under line for a ballgame on any given day, and you
come across a game with a 6.0 money line and a pitcher thats a (-200) favorite to win. Thats a
strong favorite in a low-scoring game (probably against a bad lineup, but a good opposing
pitcher), so you can reason that the winning team (favorite) should score 4.0 runs and the
losing team just 2.0 runs. Id want some shares of this particular starting pitcher, but Id like to
avoid both offenses in general.
But if an over/under line of 9.0 shows up, with a favored pitcher at (-180), then I can assume an
even greater spread, and load up on the opposite-handed hitters facing the unfavored pitcher
in whats probably a solid pitchers ballpark. But Im probably staying away from both pitchers.
Figure youll be looking at over-under lines ranging from 6.0 to 10.0 among all the matchups
on any given day.
Player Props
Some sportsbooks will also offer player proposition (or prop) bets which are usually based on
individual stats, like number of strikeouts for a pitcher or odds of hitting a home run for a hitter.
These are pretty self-explanatory in how they can help a FanDuel player. Wouldnt you like to
load up on a pitcher Vegas believes will strike out around 10 batters tonight? While home run
sluggers rarely come cheap, wouldnt you like to own the one with the greatest odds of hitting
at least one home run tonight?

Whats really key here is finding players who normally dont find themselves listed with the
others in the group. Which one of these things are not like the other? You might find a
slugging middle infielder with a great pitching matchup in a hitters park, or you could find a
good left-handed pitcher facing a free-swinging righty lineup.
By taking into account over-under lines, as well as money lines and player props, FanDuel
players gives themselves more opportunities to win, while adding some precise tools to their
3/5
11/16/2015
arsenal.
The NFL is back on FanDuel! Enter the $1 Million NFL Rush for Week 1. Just $5 to enter, and
first place will walk home with $100,000. Submit a lineup now, and change it anytime up until
9/13.
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by Alan Goldsher
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11/16/2015
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5/5
EXHIBIT T
INDEX NO. 453056/2015

11/16/2015
NYSCEF DOC. NO. 26
DraftKings, FanDuel daily fantasy sports advertising - Business Insider
Fantasy sports companies spend so

much on commercials they're moving
the needle on TV ad spending
MYLES UDLAND
OCT. 6, 2015, 2:56 PM
You are not imagining it: daily

fantasy sports companies spend
incredible amounts of money on
advertising.
According to Nomura analyst
Anthony DiClemente, DraftKings
and FanDuel likely spent a
combined $150 million on TV and
internet advertising in the third
quarter, which ended September
30 and included the beginning of
the football season.
DraftKings TV
This is a massive sum of money. All told, this increase in spending from DraftKings and FanDuel
could add 0.5% to TV advertising growth in the third quarter of the year.
For some perspective, total spending on TV advertising in the third quarter was over $15 billion.
And so while daily fantasy sports are small advertisers on an absolute basis, they did move the
industry needle.
http://www.businessinsider.com/draftkings-fanduel-daily-fantasy-sports-advertising-2015-10
1/4
11/16/2015
DraftKings,FanDueldailyfantasysportsadvertising-BusinessInsider
Nomura
ButasoutletsrangingfromTheWallStreetJournaltothreadsonreddithavenoted,theseads
arelittleannoying.AndaccordingtoLegalSportsReport,inlatesummerjustaheadofthestart
oftheNFLseason,DraftKingswasaveragingacommercialevery90seconds.
Sobasically,ifyou'vebeennearatelevisiononaweekendinthelastcouplemonthsyou'veseen
acommercialforFanDuelorDraftKings(andpotentiallybeenannoyedbyit).
TherecentnegativePRforthecompanies,however,willnowputtothetestjusthoweffective
thatadvertisinghasbeen.
OnMonday,newsbrokethatdatafromDraftKingswasinadvertentlyleakedbeforethestartof
NFLgamestwoweekendsago.Thatsameweekend,anemployeefromDraftKingswon
$350,000playingdailyfantasysportsonFanDuel.
YouTube/Screenshot
Thecompanieshavesaidthisdataleakwasnotrelatedtothatemployee'swinnings.Theydid,
however,revisepoliciesthatallowedemployeestoplaydailyfantasyatothersites.
Dailyfantasysports,fortheuninitiated,giveeveryplayerabudgetwhichtheyusetoselect
playerstheythinkwillaccumulatethemostpointsinagivenweekrushingyards,passing
2/4
11/16/2015
yard,touchdowns,etc.witheverybodypickingallnewteamseachweek.
Traditionalfantasysportsseeplayersstayononeteamallyear(ormostofit:thedetailsaren't
thatimportant),whichcangetboring.Dailyfantasyalsopaysoutbigprizesforverylittlemoney
(whichisimportant).Andifyou'rewondering,it'snotgamblingbecauseofalegaltechnicality.
(They'vebeenjudgedgamesofskill,notluck.Fornow.)
AsTechInsider'sDrakeBaerwroteafewweeksago,thewaydailyfantasygamesworkisby
usingthe"sharkandfish"theory.Thisbasicallymeansthegamesneedalotofpeopletoplay
evenforalittlebitofmoneyinordertopayoutbigprizeswhich,intheory,enticepeopleto
keepplaying.
Thewaythecompaniesspendmoneyonadvertisingcertainlymakesclearthatthisisaoneway
betonincreasingusergrowth.Andsonowifyou'reunsureabouttheintegrityofthegameyou're
gettingonDraftKingsandFanDuel,areyoulikelytokeepplaying?
MichaelJ.LeBrechtII/SportsIllustrated/Getty Images
NigelEccles,CEO,andTomGriffiths,CPO,ofFanDuel.
Atfirstblush,then,thisnewsseemsverybadforthecompaniesandwasinitiallycharacterized
asakinto"insidertrading"whileothersarguedthatitsmorelike"front-running."
Yourviewonwhichfinancialcrimethismostvaguelyresemblesdoesn'treallymatter(andagain,
thecompaniessaidthereisnoevidencethisinformationwasusedtoanyone'sadvantage).
Whatdoesmatteristhatpeoplehavenoticedandtakenaninterestineventhislimited
scandalbecause,a)thesecompanieshavebeeninyourfaceadvertisinglikecrazyandfrayedthe
nervesofevenfolkswhoplayandsupporttheventureand,b)thesecompaniesdependon
havingandmaintainingconsumerconfidence.
Again,thesecompanies'entirebusinessmodelisdependentonanevergrowingpoolofplayers
topayalittlebitofmoneyforaverysmallshotataverybigprize.
(Andlike,yes,everycompany'sbusinessmodelis,atheart,abetthatthemarketfortheir
productwillgetlarger,butthesecompaniesveryliterallyneedmoremoneytokeepcomingin
ordertokeepdeliveringonthepayoutspromised,whicharethecompany'swholeappeal.)
Now,thishiccupfortheindustryisn'tlikelytoderailthewholething.AsDiClementepointsout,
bothcompanieshaveraisedmorethan$350millioninventurefunding,withthe"vastmajority"
raisedsinceJuly.
3/4
11/16/2015
DiClementealsonotesthatDraftKingshasa3year,$250millionspendingcommitmentwith
ESPNandthatthereareseveralbigventurecapitalandprivateequitynamesinvestedinthese
companiesinadditiontosportsleaguesthemselves.
InvestorsinDraftKingsinclude21stCenturyFox,KraftGroup(foundedbyRobertKraft,owner
oftheNFL'sNewEnglandPatriots),andMelo7TechPartners(theventurecapitalfirmfounded
byNewYorkKnicksstarCarmeloAnthony).FanDuelinvestorsincludeKKR,Google,andTime
WarnerInvestments.
Andsofutureadvertisingspendingfromthesecompanies'partnersseemslikelytocontinue
giventhatmanydailyfantasyinvestorsaretheinvestmentarmsofcompaniesthatwillreapthe
benefitsofDraftKingsandFanDuelcontinuingtospendaddollars.
Butthewholethingultimatelydependsonthetypicallyficklewhimsofconsumers.
NOWWATCH:Fantasysportsemployeesmaybecheatingthe
competition
More:DailyFantasySportsDraftKingsFanDuelAdvertising
4/4
EXHIBIT U

NYSCEF DOC. NO. 9
INDEX NO. 453054/2015


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SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE DIVISION: FIRST DEPARTMENT

THE PEOPLE OF THE STATE OF NEW YORK,

Index No. 453056/15

Index No. 453054/15

AFFIRMATION OF VALERIE FIGUEREDO IN OPPOSITION TO

I am an Assistant Solicitor General in the Office of the New York

State Attorney General.

The facts set forth in this affirmation are based on my personal

knowledge, on information and belief, and on information contained in the

Complaint, People v. FanDuel, Inc., filed Nov. 17, 2015

Complaint, People v. DraftKings, Inc., filed on Nov. 17, 2015

Affidavit of Vanessa Ip, dated Nov. 6, 2015 (People v. FanDuel)

Affidavit of Vanessa Ip, dated Nov. 6, 2015 (People v. Draft

Opinion, Attorney General of the State of Louisiana,

Petition, Draft Kings, Inc. v. Schneiderman, filed Nov. 13, 2015

Complaint, FanDuel, Inc. v. Schneiderman, filed Nov. 13, 2015

Walt Bogdanich & Jacqueline Williams, For Addicts, Fantasy

(attached to Affirmation of Justin Wagner, dated November 23,

Ed Miller & Daniel Singer, For Daily Fantasy Sports Operators,

Affidavit of Timothy Dent, dated Nov. 15, 2015 (Draft Kings)

Affidavit of Gregory B. Karamitis, dated Nov. 15, 2015

Affidavit of Jason Robins, dated Nov. 23, 2015 (DraftKings)

Affidavit of Peter Jennings, dated Nov. 23, 2015 (DraftKings)

Affidavit of Dr. Abraham J. Wyner, dated Nov. 23, 2015 (Draft

Christopher Palmeri, DraftKings, FanDuel Are Uber to Casinos

Eilers Research, LLC, Keynote: Bold Predictions on the Daily

Affidavit of Keith S. Whyte, dated Nov. 12, 2015 (P. v. FanDuel;

Affirmation of Dr. Jeffrey L. Derevensky, dated Nov. 12, 2015

David Gonos, Using Vegas Lines to Help You Succeed in Daily

Fantasy Baseball, FanDuel Insider (attached to Affirmation of

Myles Udland, Fantasy Sports Companies Spend So Much on

Affirmation of Justin Wagner, dated Nov. 16, 2015 (P. v.

New York, New York

INDEX NO. 453056/2015

FILED: NEW YORK COUNTY CLERK 11/17/2015 09:44 AM

RECEIVED NYSCEF: 11/17/2015

SUPREME COURT OF THE STATE OF NEW YORK

Index No. _______

IAS Part ________

Fantasy sports is a game enjoyed and legally played by millions of people

nationwide, including in New York.

dollars and win 10, 20 thousand dollars.

of its games, FanDuel managed to avoid serious scrutiny as a gambling business. As an

operate an unlawful gambling business in New York.

Plaintiff People of the State of New York, by Attorney General Eric T.

Defendant FanDuel is a Delaware corporation, with its principal place of business

Traditional Fantasy Sports Gained Fans as a Friendly, Season-Long Competition

In traditional fantasy sports, participants create imaginary or fantasy teams

Each traditional fantasy league typically designates a commissioner, i.e. one of

sports competitions share several common elements:

A competitive draft. Prior to the start of sports season, participants draft

Trading, Dropping, Adding Players, and Setting Lineups. To be successful

To remain competitive in traditional fantasy sports, participants must adjust teams

and lineups throughout a season. No single game or week is determinative of a participants

Most participants in traditional fantasy leagues do not participate in competitions

The Fantasy Sport Trade Association (FSTA), a trade association representing

The sweeping majority of participants in traditional fantasy sports compete solely

for bragging rights or side wagers.

An Internet Gambling Prohibition Inspires a New Form of Internet Gambling

provided that: No provision of this subchapter shall be construed as altering, limiting, or

Reviewing UIGEA, however, Eccles seized on language that excluded certain