Department of Justice will not weigh in on DraftKings, FanDuel controversy

With a high-powered legal showdown over daily fantasy sports shaping up in New York, the U.S. Department of Justice remains concerned about online gambling, including fantasy sports, but isn't ready to weigh in on the current controversy involving industry leaders DraftKings and FanDuel.

"The Department of Justice remains concerned about Internet gambling because of the potential for gambling by minors and compulsive gambling, the potential for fraud and money laundering and the potential for involvement of organized crime," Department of Justice spokesman Peter Carr told ESPN Chalk on Friday morning. "We'll decline to speculate on the legality of specific online sites.

"Federal law on this subject applies to gambling businesses and payment processors," Carr added, "not to individuals who place wagers on these sites. As to whether individuals placing such wagers might be in violation of their states' gambling laws is a separate question."

The Department of Justice has expressed its opinion on fantasy sports in the past. In a 1999 letter to Vermont Sen. Patrick Leahy, obtained by ESPN Chalk, then acting assistant attorney general Jon P. Jennings wrote, "The Department of Justice is also of the opinion that there should be no special exemptions for bets or wagers of fantasy sports leagues and contests, as we can think of no reason why bets or wagers on fantasy sports leagues placed or accepted by gambling businesses should be allowed on the Internet when bets or wagers on sporting events and games of chance are not."

New York Attorney General Eric Schneiderman sent cease-and-desist orders to DraftKings and FanDuel on Monday. The companies have until Tuesday to persuade Schneiderman's office not to proceed with litigation. DraftKings hired prominent attorneys David Boies and Jonathan Schiller on Thursday to handle the case.

"A swift resolution would protect the rights of customers and allow DraftKings players to continue to play the fantasy sports games so many love," the company said in a Thursday statement.

Daily fantasy fans gathered in front of Schneiderman's office in Manhattan on Friday morning to protest the attorney general's decision.

Information from ESPN Chalk contributor Ryan Rodenberg was used in this report.