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Oct. 25 — Online daily fantasy sports providers DraftKings Inc. and FanDuel Inc. have agreed to pay a total of $12 million to settle lawsuits alleging false advertising practices, New York Attorney General Eric T. Schneiderman announced Oct. 25.
Schneiderman (D) reached separate agreements with the two companies, who will each pay $6 million and make changes to their marketing practices, according to the announcement. The agreements require, among other things, a clear disclosure of terms for marketing promotions and material facts concerning representations of expected winnings.
The agreements resolve all outstanding claims Schneiderman brought against the companies since November 2015. Schneiderman in March had reached a partial settlement with the companies that shut down daily fantasy sports in the state until legislators could pass a regulatory scheme (21 ECLR 403, 3/23/16). The state enacted a law legalizing and regulating daily fantasy sports in August (21 ECLR 31, 8/10/16).
“Today’s settlements make it clear that no company has a right to deceive New Yorkers for its own profit,” Schneiderman said in a statement announcing the settlements. “DraftKings and FanDuel will now be required to operate with greater transparency and disclosure and to permanently end the misrepresentations they made to millions of consumers.”
FanDuel spokeswoman Justine Sacco said in an e-mailed statement that the negotiations were “tough but fair.” DraftKings said in an e-mailed statement that the company is “pleased to move forward” and that it is “focused on ensuring that millions of passionate sports fans across the country are able to continue engaging in an innovative way with the sports and athletes they love.”
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