MLB may terminate its exclusive marketing agreement with DraftKings if the company fails to adhere to New York State law, reports The New York Times.
Daily fantasy sports companies, namely DraftKings and FanDuel, have faced legal challenges in New York, where attorney general Eric Schneiderman ruled the companies qualify as illegal gambling. The Times also reports the FBI and IRS are investigating how fantasy sports affect “problem gamblers.”
MLB has a marketing partnership with DraftKings, although games for the sport can also be played on FanDuel. The two companies filed lawsuits in response to Schneiderman, claiming their contests are games of skill as opposed to chance.
DraftKings issued a statement to SI.com on the matter.
“DraftKings values all of its strategic partners and is proud of its exclusive relationship with Major League Baseball,” says Jonathan Schiller, Managing Partner, Boies, Schiller & Flexner LLP. “Major League Baseball has taken no steps to terminate its relationship with DraftKings and the Commissioner has publicly stated that he is ‘quite convinced it is a game of skill, as defined by the federal statute’ and that he is 'comfortable with the idea that it's not gambling.’”
New York and Texas have both deemed the games gambling in the last year. Nevada’s Gaming Control Board also ordered the sites to stop operating in the state.
The companies were granted a permanent stay in New York, allowing them to operate while legal issues are settled in court.
MLB is not the only professional sports league to have a partnership with daily fantasy. The NBA is partners with FanDuel, while multiple NFL teams have their own partnerships with the two companies.