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The two leading players in the daily fantasy sports space have each agreed to pay $6 million to the state of New York over false advertising violations.

The two were originally accused of violating state gambling laws, but New York and the companies earlier agreed to a deal that only left the false advertising claims to be resolved.

The office of New York Attorney General Eric Schneiderman announced the latest deal on Tuesday. Both companies have agreed to “sweeping marketing reforms.” The changes include disclosure to users about expected winnings and “rates of success.”

“The settlement agreements impose the highest New York penalty awards for deceptive advertising in recent memory,” according to the attorney general’s office.

In order to come up with a combined penalty of $12 million, the office “reviewed and considered the financial condition of the companies.”

New York has nearly 13 percent of the active users for the companies.

“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. "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. These agreements will help ensure that both companies operate, honestly and lawfully in the future.”

The settlement requires that both companies set up a website that provides information about the percentage of winnings captured by the top one, five and 10 percent of players.

In August, New York passed a bill legalizing daily fantasy sports. The legislation came just a handful of months after DraftKings and FanDuel agreed to stop accepting New York players until legislation was passed.

Tuesday’s settlement also calls for some safeguards against problem gambling.

Both companies issued statements following the announcement Tuesday. DraftKings said it’s “pleased to move forward” in New York, while FanDuel said “the negotiations were tough but fair, but we are very pleased to have reached a resolution.”

http://www.cardplayer.com/poker-news/20953-draftkings-fanduel-pay-12-million-to-settle-new-york-gambling-case


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