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DraftKings, FanDuel will pay $6M each in settlement of N.Y. suit

Daily fantasy operators DraftKings and FanDuel will pay $6 million each in separate settlements with New York Attorney General Eric Schneiderman over false advertising claims, the attorney general's office announced Tuesday.

The settlement includes acknowledgement of findings from the attorney general's investigation into both companies' advertising practices, which "targeted users with a propensity for gambling and addiction" and were found to be misleading and deceptive.

DraftKings and FanDuel did not admit or deny the attorney general findings, according to the settlements.

The $12 million is the highest penalty for deceptive advertising in recent memory, according to the attorney general's office.

"Today's settlements make it clear that no company has a right to deceive New Yorkers for its own profit," Schneiderman said in the release announcing the settlement. "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 settlements resolve Schneiderman's suit against the two leading daily fantasy sports operators that began in November 2015.

Per the settlements' terms, both companies agreed to "sweeping marketing reforms, including enhanced disclosure to users about terms and conditions of marketing promotions, expected winnings and rates of success.

"[T]he negotiations were tough but fair," FanDuel spokeswoman Justine Sacco said in a statement. "But we are very pleased to have reached a resolution as this allows us to focus on our busiest time of year with NFL, NHL and soccer in full swing, and NBA season starting tonight."

DraftKings said in a statement acknowledging the settlement that it was "pleased to move forward as our business continues to grow."

The settlements come as the financial health of both companies is under scrutiny. The attorney general's office said it reviewed and considered the financial condition of the companies in determining the amount and schedule for the settlement payments.