NYGA

Complainant,
v.

DRAFTKINGS INC., FANDUEL INC. AND FANTASY

SPORTS FOR ALL

Respondents.

IN THE MATTER OF AN INVESTIGATION INTO DRAFT KINGS,

FANDUEL AND FANTASY SPORTS FOR ALL FOR FAILURE TO
REGISTER AS A LOBBYIST, ENGAGING IN ILLEGAL LOBBYING
ACTIVITY AND FURTHER TO INVESTIGATE A VIOLATION OF
SECTION 1-m OF THE LOBBY ACT (ILLEGAL GIFT)
INTRODUCTION
New York Gaming Association (NYGA or Complainant) files this
Complaint on behalf of its members and the residents of New York State. Based

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on the information detailed in this Complaint, NYGA respectfully urges the New
York State Joint Commission on Public Ethics (the Commission) and/or The
Office of the New York State Attorney General to investigate DraftKings Inc.,
FanDuel Inc. and Fantasy Sports for All for engaging in a lobbying campaign
while failing to register and properly report lobbying expenditures and hiding
the true identity of the groups attempting to influence New York State
government and public officials thereof.
Upon information and belief this Complaint is jointly filed against
DraftKing, FanDuel and Fantasy Sports for All. At all times relevant to the
illegal conduct alleged herein, Respondents were acting jointly, severally, and in
cooperation with others.
Upon information and belief beginning at least as early as May 25, 2016
and continuing to date, DraftKing, FanDuel and Fantasy Sports for All have
engaged in lobbying and lobbying activities as defined under 1-c (c) of the
Lobbying Act. DraftKing, FanDuel and Fantasy Sports for All conduct includes
but is not limited to attempts to influence, support, pass, oppose, defeat, and/or
impact the passage and/or introduction of state legislation specifically Fantasy
Sports legislation and the introduction and/or intended introduction of
legislation to legalize fantasy sports wagering. DraftKing, FanDuel and Fantasy
Sports for All conduct constitutes lobbying and lobbying activities within the
meaning of the Lobby Act and, with respect to specific conduct detailed herein,
since the DraftKing, FanDuel and Fantasy Sports for All spent well over $5000

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annually during the relevant time frames, DraftKing, FanDuel and Fantasy
Sports for All have engaged in illegal lobbying activities by failing to register as
a lobbyist and report their lobbying expenditures.

Such registration and

reporting would have required the identification and listing of the sources of
funding for DraftKing, FanDuel and Fantasy Sports for All, information that
has been improperly withheld and shielded from public review.

I.

Draftkings
Draftkings is a private company founded and based in Boston,

Massachusetts at 225 Franklin Street. Its CEO is Jason Robins.

A.

DraftKings Conduct is Intended to Influence the Outcome of

Legislation

Upon information and belief, DraftKings through its employees and

officers has attempted to influence the introduction of legislation and has
advocated for the passage of legislation through the use direct lobbying of public
officials and through the use of web sites, news and print, radio, billboards, and
television to lobby and influence public opinion.
In fulfilling its goal of lobbying for the legalization of fantasy sports
wagering DraftKings has caused its officers and employees to engage in direct
lobbying by meeting with public officials, including but not limited to Assembly
member Gary Pretlow, to advocate for the passage of legislation to legalize

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fantasy sports wagering it has also published advertisements, op-eds, letters to

the editor, and maintains and or controls web sites.
Upon information and belief, DraftKings through its employees and
officers on May 25, 2016 engaged in a press conference on the steps of New York
City Hall to urge state lawmakers to pass fantasy sports legislation.
DraftKings has used direct lobbying and advertising as one tool to
influence legislation. Another effort they have used to influence legislation are
their web sites.
Recently, upon information and belief, DraftKings has created and
operated the web site www.fantasysportsforall.com.

The forall web site

contains grassroots lobbying activity including a call to action to contact elected

officials to support and/or pass fantasy sports legislation. These grassroots
lobbying activities are intended to inflame and divide communities and place
pressure on elected officials to assist DraftKings in their unreported lobbying
efforts on behalf of their unnamed and unidentified partners and/or donors.
DraftKings efforts to influence the outcome of legislation and the intended
introduction of legislationby advertising, web sites or any other medium
clearly constitute lobbying and lobbying activities under the Lobbying Act.
DraftKings are unregistered lobbyists. DraftKings has attempted to influence a
legislative item specifically, but not limited to fantasy sports legalization
legislation in the form of S6793 and/or A10473.

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B.

DraftKings Has Never Registered as a Lobbyist

DraftKings has never registered as a lobbyist for its lobbying activities or

reported its lobbying expenditures related to the conduct discussed herein. The
Lobbying Act 1-e requires every lobbyist to submit a statement of registration
with the Commission if they have more than $5000 of reportable compensation
and expenses for lobbying in any calendar year for all clients individually.
Further, the Lobbying Act 1-h requires that any lobbyist required to file a
statement of registration pursuant to 1-e of the Lobbying Act who in any
lobbying year, reasonably anticipates that during the year such lobbyist will
expend, incur or receive combined reportable compensation and expenses in an
amount in excess of five thousand dollars shall file with the commission a bimonthly written report for each client on whose behalf it registers, on forms
supplied by the commission, by the fifteenth day next succeeding the end of the
reporting period in which the lobbyist was first required to file a statement of
registration. Such reporting periods shall be the period of January first to the
last day of February, March first to April thirtieth, May first to June thirtieth,
July first to August thirty-first, September first to October thirty-first and
November first to December thirty-first.
Section 1-o of the Lobby Act provides any lobbyist or client who knowingly
and willfully fails to file timely a report or statement required by this section or
knowingly and willfully files false information shall be guilty of a class A
misdemeanor. In addition, any lobbyist or client who knowingly and willfully

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fails to file a statement or report within the time required for the filing of such
report shall be subject to a civil penalty for each such failure or violation, in an
amount not to exceed the greater of twenty-five thousand dollars or three times
the amount the person failed to report properly.
There are sufficient facts in the record to commence an investigation by
the Commission of DraftKings failure to register and report lobbying activity in
2016 in violation of 1-e and 1-h of the Lobby Act.
II.

FanDuel
FanDuel is a private company founded and based in New York, New York.

Its CEO is Nigel Eccles.

A.

FanDuels Conduct is Intended to Influence the Outcome of

Legislation

Upon information and belief, FanDuel through its employees and officers,
specifically Nigel Eccles, has attempted to influence the introduction of
legislation and has advocated for the passage of legislation through the use of
direct lobbying of public officials and through the use of web sites, news and
print, radio, billboards, and television to lobby and influence public opinion.
In fulfilling its goal of lobbying for the legalization of fantasy sports
wagering FanDuel has caused its officers and employees, specifically but not
limited to its CEO Nigel Eccles, to engage in direct lobbying by meeting with
public officials, including but not limited to Assembly member Gary Pretlow, to
advocate for the passage of legislation to legalize fantasy sports wagering it has

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also published advertisements, op-eds, letters to the editor, and maintains and
or controls web sites.
Upon information and belief, FanDuel through its employees and officers
on May 25, 2016 engaged in a press conference on the steps of New York City
Hall to urge state lawmakers to pass fantasy sports legislation.
In addition, FanDuels CEO Nigel Eccles published a call to action
grassroots lobbying advertisement wherein he urged readers to contact their
legislator in Albany and provided an electronic link to send the legislators a
lobbying communication.
Further FanDuels CEO Nigel Eccles sent a letter to the leaders of the
New York State legislature threatening to shut FanDuels offices in New York if
they did not pass the legislation his company was lobbying for.
FanDuel has used direct lobbying and advertising as one tool to influence
legislation. Another effort they have used to influence legislation are their web
sites.
Recently, upon information and belief, FanDuel has created and operated
the web site www.fantasysportsforall.com.

The forall web site contains

grassroots lobbying activity including a call to action to contact elected officials

to support and/or pass fantasy sports legislation. These grassroots lobbying
activities are intended to inflame and divide communities and place pressure on
elected officials to assist FanDuel in their unreported lobbying efforts on behalf
of their unnamed and unidentified partners and/or donors.

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FanDuels efforts to influence the outcome of legislation and the intended

introduction of legislationby advertising, web sites or any other medium
clearly constitute lobbying and lobbying activities under the Lobbying Act.
FanDuel are unregistered lobbyists. FanDuel has attempted to influence a
legislative item specifically, but not limited to fantasy sports legalization
legislation in the form of S6793 and/or A10473.
B.

FanDuel Has Never Registered as a Lobbyist

FanDuel has never registered as a lobbyist for its lobbying activities or

reported its lobbying expenditures related to the conduct discussed herein. The
Lobbying Act 1-e requires every lobbyist to submit a statement of registration
with the Commission if they have more than $5000 of reportable compensation
and expenses for lobbying in any calendar year for all clients individually.
Further, the Lobbying Act 1-h requires that any lobbyist required to file a
statement of registration pursuant to 1-e of the Lobbying Act who in any
lobbying year, reasonably anticipates that during the year such lobbyist will
expend, incur or receive combined reportable compensation and expenses in an
amount in excess of five thousand dollars shall file with the commission a bimonthly written report for each client on whose behalf it registers, on forms
supplied by the commission, by the fifteenth day next succeeding the end of the
reporting period in which the lobbyist was first required to file a statement of
registration. Such reporting periods shall be the period of January first to the
last day of February, March first to April thirtieth, May first to June thirtieth,

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July first to August thirty-first, September first to October thirty-first and

November first to December thirty-first.
Section 1-o of the Lobby Act provides any lobbyist or client who knowingly
and willfully fails to file timely a report or statement required by this section or
knowingly and willfully files false information shall be guilty of a class A
misdemeanor. In addition, any lobbyist or client who knowingly and willfully
fails to file a statement or report within the time required for the filing of such
report shall be subject to a civil penalty for each such failure or violation, in an
amount not to exceed the greater of twenty-five thousand dollars or three times
the amount the person failed to report properly.
There are sufficient facts in the record to commence an investigation by
the Commission of FanDuel failure to register and report lobbying activity in
2016 in violation of 1-e and 1-h of the Lobby Act.
III.

Fantasy Sports For All

Upon information and belief, Fantasy Sports for All is a not for profit

organization created by DraftKings and FanDuel that maintains a website

Fantasy Sports for All whose primary purpose is to engage in grassroots
lobbying.
A.

Fantasy Sports for All Conduct is Intended to Influence the

Outcome of Legislation

Upon information and belief, Fantasy Sports for All through its employees
and officers has attempted to influence the introduction of legislation and has

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advocated for the passage of legislation through the use direct lobbying of public
officials, including but not limited to Assembly member Gary Pretlow, and
through the use of web sites, news and print, radio, billboards, and television to
lobby and influence public opinion.
In fulfilling its goal of lobbying for the legalization of fantasy sports
wagering Fantasy Sports for All has caused its officers and employees to engage
in direct lobbying by meeting with public officials to advocate for the passage of
legislation to legalize fantasy sports wagering it has also published
advertisements, op-eds, letters to the editor, and maintains and or controls web
sites.
Upon information and belief, Fantasy Sports for All through its employees
and officers on May 25, 2016 engaged in a press conference on the steps of New
York City Hall to urge state lawmakers to pass fantasy sports legislation.
Fantasy Sports for All has used direct lobbying and advertising as one tool
to influence legislation. Another effort they have used to influence legislation are
their web sites.
Recently, upon information and belief, Fantasy Sports for All has created
and operated the web site www.fantasysportsforall.com. The forall web site
contains grassroots lobbying activity including a call to action to contact elected
officials to support and/or pass fantasy sports legislation. These grassroots
lobbying activities are intended to inflame and divide communities and place
pressure on elected officials to assist Fantasy Sports for All in their unreported

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lobbying efforts on behalf of their unnamed and unidentified partners and/or

donors.
Fantasy Sports for All efforts to influence the outcome of legislation and
the intended introduction of legislationby advertising, web sites or any other
mediumclearly constitute lobbying and lobbying activities under the Lobbying
Act. DraftKings are unregistered lobbyists. DraftKings has attempted to
influence a legislative item specifically, but not limited to fantasy sports
legalization legislation in the form of S6793 and/or A
B.

Fantasy Sports for All Has Never Registered as a Lobbyist

Fantasy Sports for All has never registered as a lobbyist for its lobbying
activities or reported its lobbying expenditures related to the conduct discussed
herein. The Lobbying Act 1-e requires every lobbyist to submit a statement of
registration with the Commission if they have more than $5000 of reportable
compensation and expenses for lobbying in any calendar year for all clients
individually. Further, the Lobbying Act 1-h requires that any lobbyist required
to file a statement of registration pursuant to 1-e of the Lobbying Act who in
any lobbying year, reasonably anticipates that during the year such lobbyist will
expend, incur or receive combined reportable compensation and expenses in an
amount in excess of five thousand dollars shall file with the commission a bimonthly written report for each client on whose behalf it registers, on forms
supplied by the commission, by the fifteenth day next succeeding the end of the
reporting period in which the lobbyist was first required to file a statement of

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10

registration. Such reporting periods shall be the period of January first to the
last day of February, March first to April thirtieth, May first to June thirtieth,
July first to August thirty-first, September first to October thirty-first and
November first to December thirty-first.
Section 1-o of the Lobby Act provides any lobbyist or client who knowingly
and willfully fails to file timely a report or statement required by this section or
knowingly and willfully files false information shall be guilty of a class A
misdemeanor. In addition, any lobbyist or client who knowingly and willfully
fails to file a statement or report within the time required for the filing of such
report shall be subject to a civil penalty for each such failure or violation, in an
amount not to exceed the greater of twenty-five thousand dollars or three times
the amount the person failed to report properly.
There are sufficient facts in the record to commence an investigation by
the Commission of Fantasy Sports for All failure to register and report lobbying
activity in 2016 in violation of 1-e and 1-h of the Lobby Act.
IV.

DraftKings, FanDuel and Fantasy Sports for All grassroots

activity
DraftKings, FanDuel and/or Fantasy Sports for All sponsored websites in
2016 that included grassroots communications constituting lobbying.

These

web sites were available to be seen by New York State legislators along with the
Governor. The web sites generally encourage readers and/or listeners to contact
public officials to support legislation or the intended introduction of legislation

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11

related to the legalization of fantasy sports

During the relevant timeframes, specific legislation was pending and/or
was intended to be introduced before the New York State Senate and Assembly
that actions by DraftKings, FanDuel and Fantasy Sports for All employees and
officers along with statements on the DraftKings FanDuel and/or forall web
site sought to influence. Since these web sites and associated activities upon
information and belief cost more than $5000, if the Commission were to
determine they met the definition of lobbying, DraftKings, Fanduel and/or
Fantasy Sports for All would be in violation of the Lobby Act for failure to
register and report their lobbying activity.
V. Prior allegations of ethical misconduct by the respondents in other
jurisdictions.
It has been reported by Illinois Public Radio that a FanDuel lobbyist was
accused by an Illinois House Representative of offering members of the Black
Caucus to make considerations or donations to get lawmakers to vote for
legislation (see exhibit attached).
In Rhode Island DraftKings hired the Governors Chief of Staffs wife
while he was negotiating legislation that impacted his wifes new employer (see
exhibit attached).

JURISDICTION OF THE COMMISSION

The Commission is authorized by Executive Law 94(12) (a) to commence

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12

inquiries into possible violations of Article 1-A of the Legislative Law. Pursuant
to Executive Law 94(16) (d), the Commission is authorized to conduct any
investigation necessary to carry out the provisions of Executive Law 94.
Pursuant to this power and duty, the Commission may administer oaths or
affirmations, subpoena witnesses, compel their attendance and require the
production of any books or records that it may deem relevant or material. When
the Commission determines there has been a violation Article 1-A of the
Legislative Law authorizes the Commission to assess a civil penalty in an
amount not to exceed the greater of twenty-five thousand dollars or three times
the amount the person failed to report properly.
In lieu of a civil penalty, the Commission may refer a violation of the
Lobby Act 1-e and 1-h to an appropriate prosecutor which, upon conviction,
shall be punishable as class A misdemeanor. Executive Law 94(12)(b) provides
that if the Commission determines that there is reasonable cause to believe that
a violation of Article 1-A of the Legislative Law has occurred, the Commission
shall send a notice of reasonable cause: (i) to the reporting individual or (ii) to
the complainant, if any.

FAILURE TO REGISTER AND REPORT EXPENDITURES

AS A LOBBYIST PURSUANT TO 1-e and 1-h OF THE LOBBY ACT
A.

The New York State Lobbying Act

The Lobby Act requires registration by all entities engaged in lobbying

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13

activity:
1-e. Statement of registration. (a) (1) Every lobbyist shall
annually file with the commission, on forms provided by the
commission, a statement of registration for each calendar
year.
Only lobbyists are required to register under the Act. A lobbyist is defined
under the 1-c (a) and provides, The term lobbyist shall mean every person or
organization retained, employed or designated by any client to engage in
lobbying. The Act defines lobbying under 1-c (c) providing:
The term lobbying or lobbying activities shall mean any attempt
to influence:
(i) the passage or defeat of any legislation by either house of the
state legislature including but not limited to the introduction or
intended introduction of such legislation or approval or disapproval
of any legislation by the governor;
(ii) the adoption, issuance, rescission, modification or terms of a
gubernatorial executive order;
(iii) the adoption or rejection of any rule or regulation having the
force and effect of law by a state agency;
(iv) the outcome of any rate making proceeding by a state agency;
(v) any determination:
(A) by a public official, or by a person or entity working in
cooperation with a public official related to a governmental
procurement, or
(B) by an officer or employee of the unified court system, or by a
person or entity working in cooperation with an officer or employee
of the unified court system related to a governmental procurement;
(vi) the approval, disapproval, implementation or administration of
tribal-state compacts, memoranda of understanding, or any other

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14

tribal-state agreements and any other state actions related to Class

III gaming as provided in 25 U.S.C. 2701, except to the extent
designation of such activities as "lobbying" is barred by the federal
Indian Gaming Regulatory Act, by a public official or by a person or
entity working in cooperation with a public official in relation to
such approval, disapproval, implementation or administration;
(vii) the passage or defeat of any local law, ordinance, resolution, or
regulation by any municipality or subdivision thereof;
(viii) the adoption, issuance, rescission, modification or terms of an
executive order issued by the chief executive officer of a
municipality;
(ix) the adoption or rejection of any rule, regulation, or resolution
having the force and effect of a local law, ordinance, resolution, or
regulation; or
(x) the outcome of any rate making proceeding by any municipality
or subdivision thereof.
The Commission is the regulatory body charged with determining if
registration is or was required by the aforementioned entities. The Commission
has just recently issued an opinion relative to the definition of lobbying and
more specifically whether advertisements, such as those placed by Citizens
Committee, would require registration and the concomitant reporting of
expenses. In addition, the Commissions predecessor agency, the Temporary
Commission on Lobbying (TCL) has issued opinions on the matter and the
Commission has specifically stated it will follow any precedence established by
the TCL unless and until specifically superseded by Commission opinions. The
TCL has issued several opinions, 79-1, 84-1, 97-1, 00-2 and 00-3 that provide
clear guidance and a means to determine if any individual advertisement would

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15

necessitate registration and/or reporting as a lobbying expense.

Opinion 79-1 holds that the Commission will conform to Federal case law,

United States v. Harriss, 347 U.S. 612 (1954), and consider any contacts with
legislators, the Governor or regulatory decision makers to be lobbying if the
contact is direct and further that direct contact will be interpreted to include
written or printed communications directed to the decision maker. In opinion
97-1 the Commission extended the definition of lobbying to include any attempt
to influence the defined activities that constitute lobbying irrespective of how
contact is made. The Commission specifically included, A companys use of
computer software and the Internet as activities that would fall within the Acts
meaning of direct contact.

In opinion 00-3 the Commission completed its

analysis of what would constitute a direct contact under Harriss requiring

registration holding that an advertisement urging listeners to contact a decision
maker constitutes lobbying even though it never specifically lists or identifies
the bill numbers of pending legislation.

The Commission stated in plain

language a three-part test to determine if activity constitutes lobbying. Lobbying

under New York law, occurs when the activity in question relates to pending
legislation, a position is stated, and the activity is an attempt to influence
decision makers. Op 00-3
Commission opinions 84-1 and 00-2 make clear that activity that does not
meet the three part test set forth in opinion 00-3 could still be considered a
lobbying expense that would need to be reported if the expense is part of an

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16

entitys lobbying effort. Any expenditure of a registered entity that is used in

any fashion to assist the lobbying effort would be a lobbying expense requiring
its inclusion on the entitys reports.
The commissions most recent opinion 16-1 has further clarified the
Commissions position on grass roots lobbying. It states:

JCOPE finds that the communication need only relate to a Section 1-c(c)
activity. It need not reference a bill number, but a bill (or its defeat) must be the
intended byproduct of the lobbying. Similarly, it need not identify an executive
order or regulation, but it must be clear that an executive order or regulation is
the subject of the lobbying. In sum, a grassroots communication constitutes
lobbying if it:
1. References, suggests, or otherwise implicates an activity covered by Lobbying
Act Section 1-c(c).
2. Takes a clear position on the issue in question; and
3. Is an attempt to influence a public official through a call to action, i.e., solicits
or exhorts the public, or a segment of the public, to contact (a) public official(s);
The extent to which the Commissions opinions can require registration
and reporting of advocacy that does not involve direct

face to face

communications with legislators has been challenged by the New York Civil
Liberties Union in the federal case of NYCLU v. Grandeau, 528 F.3d 122 (2d Cir.
2008). The suit was filed in 2003 alleging the Commission could not require the
reporting of advertising as a lobbying expense on First Amendment grounds.
Summary judgment was awarded to the Commission in a 2008 ruling that the

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NYCLUs First Amendment challenge was not, as a prudential matter, ripe for
judicial review. NYCLU v. Grandeau, 528 F.3d 122 (2d Cir. 2008).
The Commissions published guidelines to the Act have further stated
expenses related to a lobbying effort are reportable and is part of the amount
necessary to determine if the threshold has been met necessitating registration.
The guidelines read as follows:

Reportable expenses shall mean any expenditure incurred by or

reimbursed to the lobbyist for the purpose of lobbying. Reportable
expenses include, but are not limited to the following: advertising,
telephone,
electronic
advocacy,
food,
beverages,
tickets,
entertainment, parties, receptions or similar events, advocacy rallies,
consultant services, expenses for non-lobbying support staff, and
courier services when said expenses are part of a lobbying effort.

CONCLUSION
There is reasonable cause to believe, based on the record evidence, that
DraftKing, FanDuel and Fantasy Sports for All have failed to register as a
lobbyist and have failed to report all of their expenses incurred as part of their
lobbying efforts for the year 2016 in violation of 1-e and 1-h of the Lobby Act.
Complainant urges the New York State Joint Commission on Public
Ethics (the Commission) and/or The Office of the New York State Attorney
General to investigate the relevant facts. If either or both the New York State
Joint Commission on Public Ethics (the Commission) and/or The Office of the
New York State Attorney General determines violations have occurred, they

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18

should take any and all steps necessary to safeguard and protect the publics
interest. Section 1-a expressly states the statutes purpose, namely, to persevere
and maintain the integrity of the governmental decision-making process in this
state . . . it is necessary that the identity . . . of persons or organizations . . . be
publicly and regularly disclosed[.]

Respectfully Submitted,

David Grandeau, Esq.

Complainant

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