Night net null Baseball Basketball MLB NBA NHL null An aggressive campaign by New York Attorney General Eric T. Schneiderman to shut down daily fantasy sports companies operating in the state took another turn Tuesday when Schneiderman filed for an injunction and laid out potentially damning details about industry leaders DraftKings and FanDuel.In addition to those websites, Schneiderman has included digital media company Yahoo in its investigation, according to The New York Times. Yahoo, which in July launched its own version of daily fantasy sports contests, has grown to become No. 3 in market share. MORE: Judge denies sites' requests for restraining order | John Oliver, in monologue, calls DFS gamblingDraftKings and FanDuel are waging a very public legal
battle with the attorney general, who last week ordered the sites to cease operations in New York because he ruled the contests they offer constitute illegal gambling, according to state law. The companies responded with separate lawsuits filed in New York Supreme Court, arguing their games are skill-based and therefore are exempt from anti-gambling laws.Surrendering the New York market, which accounts for 12.8 percent of national daily fantasy sports users, would represent a huge blow to the industry.FanDuel, which is headquartered in Manhattan, on Tuesday said it will temporarily comply and halt entries from the state pending a court hearing next week. Boston-based DraftKings remained bullish, saying it will continue to allow its New York customers to play.“We believe the attorney general’s view of this issue is based on an incomplete understanding of the facts about how our business operates and a fundamental misinterpretation and misapplication of the law,” a DraftKings spokesman said in a statement.Yahoo, based in Sunnyvale, Calif., wrote on its website that it has not barred New Yorkers from playing its daily fantasy games, and it has no plans to start.“Yahoo does not comment on legal matters,” a spokesman said in a statement. “We are monitoring industry trends and events closely and believe that we offer a lawful product for our Daily Fantasy Sports users.” In court filings Tuesday, Schneiderman continued to paint the DraftKings and FanDuel business models as ones consistent with online gambling companies, contrary to the companies' public claims.“FanDuel and DraftKings’ current denials about DFS constituting gambling are belied by how the sites depicted themselves in the past and how they portray themselves behind closed doors,” Schneiderman wrote.According to The New York Times, Schneiderman tried to substantiate his claims with these and other facts:— Montana, Arizona, Washington, Louisiana and Iowa already prohibit daily fantasy sports, but the filing said DraftKings received $484,897 in entry fees from those states in 2014.— Similar to games like poker and blackjack that include elements of skill, but with outcomes largely rooted in chance, a majority of daily fantasy sports players lose money. According to DraftKings data, 89.3 percent of players on the site netted a negative return on investment from 2013 to 2014. “A few good players in a poker tournament may rise to the top based on their skill; but the game is still gambling. So is DFS," Schneiderman wrote.— The filings said FanDuel told early investors that it targets male sports fans who “cannot gamble online legally.” Draftkings executive Jason Robins described the DFS product as a “mash-up between poker and fantasy sports” with a business model “identical to a casino," according to the attorney general.— Both companies encourage employees to enter each other's contests. “FanDuel recognized that this policy would be ill-received, instructing employees to minimize their public presence ‘so users are less likely to be suspicious or angry’ and avoid becoming ‘among the top five players by volume’ because ‘top players frequently become targets for accusations,'" Schneiderman wrote.— In an effort to attract customers from search engines, DraftKings embedded keywords in its coding using language like “weekly fantasy basketball betting” and “weekly fantasy college football betting" that catered to people hoping to gamble on sports, according to the attorney general.Disclosure: SN has its own relationship with daily fantasy sports site FanDuel and regularly creates content around its games.