A New York appellate court has ruled that online fantasy sports betting is unconstitutional in the state.

“We recognize that the legislature was sympathetic to and supportive of IFS (interactive fantasy services) participants. Nevertheless, we have rejected the legislature’s explicitly stated basis for the removal of IFS from the Penal Law definitions of gambling,” the appellate panel wrote in its decision.

The ruling by the New York State Appellate Division poses a new challenge for daily fantasy sports peddlers like FanDuel and DraftKings who seek to operate in the Empire State.

At issue is a 2016 amendment to Racing, Pari-Mutuel Wagering, and Breeding Law that declared that online fantasy sports did not constitute gambling and could thus be allowed.

A group of anti-gambling advocates sued over the law arguing that it violated the constitution. In October 2018, Albany Supreme Court Justice Gerald Connolly agreed with them and declared the 2016 amendment “null and void.”

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