DraftKings and FanDuel Agree To Stop Doing Business In Idaho

May 2, 2016

Credit DraftKings / Facebook

Two national daily sports fantasy contests have agreed to stop offering their games to Idaho consumers. 

The Idaho Attorney General’s office announced Monday an agreement with DraftKings Inc. and FanDuel Inc. Attorney General Lawrence Wasden says the settlement was reached after three months of negotiations.

“The concern I have is that the paid daily sports offerings provided by these companies constitute gambling under Idaho law,” Wasden says in a news release.

The agreement went into effect Sunday. The two companies have told Idaho officials they’ll process requests from Idaho consumers to withdraw their account balances in a timely manner. The ban affects fantasy football, baseball, basketball and other sports contests.

The daily fantasy industry has been under the microscope for months over whether it offers games or gambling. Scrutiny increased – even at the Congressional level – after the companies saturated 2015 NFL broadcasts with early-season advertisements.   

Wasden’s office says the companies will keep Idaho players from participating by monitoring computer IP addresses.

Negotiations began in January after Wasden and his deputies examined the legality of the contests based on Idaho law.

“Idaho defines gambling, in part, as risking money or other thing of value for gain that is contingent in whole or part upon chance, or the outcome of an event, including a sporting event,” Wasden says. “My concern is that the daily fantasy sports offerings my office reviewed require participants to risk money for a cash prize contingent upon individual athletes’ collective performances in various future sporting events. As I see it, this falls within Idaho’s definition of gambling.”

The agreement includes some options the companies would have to resume doing business in Idaho, but officials say that would require a change in gambling laws by Idaho lawmakers.  

Here’s the text of Wasden's full news release:

(Boise) – Attorney General Lawrence Wasden says executives of two companies offering various paid Daily Fantasy Sports contests have agreed to quit providing those contests to consumers in Idaho.

The agreement with DraftKings Inc., and FanDuel Inc., two of the nation’s biggest companies offering paid fantasy sports contests, was reached after three months of negotiations, Wasden said.

Under terms of the agreement, the companies, as of May 1, 2016, will not allow any consumers based in Idaho to participate in any of their daily paid online fantasy football, baseball, basketball and other sports contests.

Both DraftKings and FanDuel have agreed to process requests by Idaho participants to withdraw their account balances in a timely manner. The companies will monitor Idaho players based on geoblocking technology or through IP addresses.

“I have a duty to enforce and uphold that law.  I commend the companies for negotiating in good faith and agreeing not to make these contests available in Idaho.”

Wasden began a review of the companies and their websites in January amid concerns regarding the legality of the daily fantasy sports games offered by those companies.  The Idaho Constitution prohibits gambling except for the state lottery, pari-mutuel betting as well as bingo and raffle games.

“Idaho defines gambling, in part, as risking money or other thing of value for gain that is contingent in whole or part upon chance, or the outcome of an event, including a sporting event,” Wasden said. “My concern is that the daily fantasy sports offerings my office reviewed require participants to risk money for a cash prize contingent upon individual athletes’ collective performances in various future sporting events. As I see it, this falls within Idaho’s definition of gambling.”

Nothing in the agreement precludes FanDuel or DraftKings from offering free daily fantasy sports leagues or other free contests that offer prizes to players in Idaho.  

The agreement signed by both companies also provides a path to resume offering paid fantasy sports contests to Idaho consumers, including the Idaho Legislature changing the law to allow for and regulate such contests. Paid daily fantasy sports contests could also resume if a court with authority and jurisdiction in Idaho rules in favor of any form of such contests.

The companies can also restart offering such contests at any time, but executives have agreed to provide the Attorney General written notice 30 days prior to doing so.  The notice serves to give the Attorney General time to evaluate the proposed contests to determine whether they comply with Idaho law.

The agreement does not constitute an admission of liability or evidence of wrongdoing by the companies, Wasden said. 

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