New York Daily Fantasy Sports Suit: The Third Department Hears Oral Argument on Whether DFS is Prohibited Gambling

Oral argument of an appeal is often an appellate attorney’s most fun moment in a case. You’ve labored over lengthy briefs on the issues at hand, thought about how you want the appellate court to decide your case, and pored over the briefs and record for hours creating an iron clad argument that will tip the court in your favor. Now the time has come when you get to stand up at that podium with a panel of Judges staring at you and engage them in a conversation about why the law says you should win.

Your case is called. You stand up and introduce yourself. May it please the Court. You start in on your well crafted first few lines, and then it begins. A barrage of questions from a hot bench, or worse yet, a cold bench where you have ten minutes to fill with no one seemingly interested. Thankfully, the advocates in White v Cuomo got a mixture of the two at oral argument before the Appellate Division, Third Department.

Because the State appealed Justice Connolly’s order holding the DFS Law unconstitutional, it was up first. Deputy Solicitor General Victor Paladino, relying on the point ably made in the State’s brief, emphasized that the Legislature had undertaken a thorough look at DFS and rationally decided that it was not gambling. When a new game is proposed in NY, he argued, the Legislature gets to decide in the first instance whether the game is gambling or not, and DFS is not. Unlike sports gambling where bettors wager on the outcome of a game over which they have absolutely no control, the relevant contest for DFS is the not the sports game, but the task of putting together the best lineup for the day to compete against other DFS players. Yes, the scores of that lineup are determined by professional players over whom the DFS player has no control, but the DFS player very much controls which players are selected. It’s just like being a general manager, Paladino argues, and that takes skill. Because the Legislature rationally concluded that the DFS contest is not gambling, and the Court is required to defer to that legislative choice, the State argued that Judge Connolly’s order should be reversed.

In contrast, Neil Murray argued for the Plaintiffs, there is only one definition of gambling in NY and when a game meets it, the Legislature can’t merely say that the game isn’t gambling. Murray argued that not only is DFS a game of chance, because a material degree of chance is involved in the result (a player could get hurt, the weather could impact game conditions, etc.), but it’s also a wager on a contingent future event over which the bettor has no control (that is, DFS is effectively wagering on player performances). Either way, because DFS fits the definition of gambling under the Penal Law section that implements the constitutional ban, the Legislature could not authorize it by mere legislation. A constitutional amendment was required.

If you watch the argument, which can be found here, the Judges did a very good job of hiding where they stood on the outcome. Only Judge Pritzker seemed to indicate through his questioning—he asked about the very heavy burden that the Plaintiffs face to establish the DFS Law’s unconstitutionality beyond a reasonable doubt—that he favored the State’s position. The remaining Judges (Presiding Justice Garry, Justice Clark, Justice Mulvey, and Justice Molly Reynolds Fitzgerald, who had only been sworn in just a few days earlier) kept a tight lid on which way they were leaning. The questions were fair and clearly showed that the Judges were well prepared for the thorny issues facing them. In light of that, it’s hard to predict where this will turn out, though I still lean slightly in favor of the State’s position given the extremely heavy burden that the Plaintiffs face and the deference usually accorded to legislative determinations. You can hear me on Capitol Pressroom with David Lombardo talking about the case here.

Whichever way this comes out, it will not be the end of the case. Because the issue of DFS’s constitutionality presents an adequate jurisdictional predicate for an appeal as of right to the Court of Appeals, the case is likely be headed there next for a final answer to the question: can DFS continue in NY without an amendment to the constitutional ban on gambling?

The Appellate Division’s decision is expected by early January 2020.

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