Déjà vu for Online Gambling Operators as Another Disgraced AG Resigns After Crippling Sector

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  • NY State Attorney General to step down by end of day Tuesday following accusations he was violent against women
  • Had once forced a large number of Daily Fantasy Sports companies to go belly up
  • Follows in the footsteps of another AG-turned Governor forced to resign in sex scandal who also crippled online gambling sector
  • “Sometimes, he’d tell me to call him Master, and he’d slap me until I did,” woman who had relationship with Schneiderman recounted

Embattled New York State Attorney General Eric Schneiderman is out the door but not before taking down an entire industry.

Daily Fantasy Sports firms DraftKings and FanDuel agreed to pay $6 million apiece to New York state to resolve lawsuits alleging the daily fantasy sports companies engaged in false advertising under a legal settlement announced by state Attorney General Eric Schneiderman in 2016.

Schneiderman’s office had also accused the two companies of misleading players about potential winnings advertisements and marketing material. Tuesday’s settlement resolves those claims.

His actions resulted in a snowballing affect that caused the loss of significant sports league sponsorships with the two firms while nearly every smaller DFS company collapsed.

Déjà vu

On Monday, Schneiderman was accused by four women - two on the record - of acting violently towards them in a shock New Yorker piece entitled "The Accuse Allegations That Brought Down New York's Attorney General".

For many in the online gambling industry, it seems like we've been here before.

On March 10, 2008, The New York Times reported that Governor of New York Eliot Spitzer had patronized an elite escort service run by Emperors Club VIP.  The ensuing scandal led to him receiving criticism and ridicule in the media, and eventually Spitzer resigned as Governor a week later on March 17.

He had previously been the Attorney General of the state, who ironically cracked down on prostitution rings.  He also aggressively pursued online gambling payment transaction companies and forced PayPal to cease doing business with the sector.

Under a settlement agreement with the state of New York under Spitzer's tenure as Attorney General, PayPal agreed not to process payments from New York customers to Internet casino websits and to pay $200,000 to New York State in disgorged profits, costs of investigation, and penalties.

"This agreement continues the work of my office to enforce the law prohibiting illegal gambling, online or off line" Spitzer said at the time. "This case shows that we intend stop any company who facilitates illegal gambling transactions."

Spitzer previously announced a settlement with Citibank, which agreed to block illegal online gambling transactions attempted through its MasterCard and Visa accounts.

He Called Me His 'Brown Slave'

Getting back to Schneiderman, the NY AG agreed to resign effective the end of the business day Tuesday (May 8).

Harvard-educated activist writer Tanya Selvaratnam told the New Yorker magazine that her yearlong affair with Schneiderman “was a fairytale that became a nightmare”

“Sometimes, he’d tell me to call him Master, and he’d slap me until I did,” Selvaratnam said.

“He started calling me his ‘brown slave’ and demanding that I repeat that I was ‘his property.’”

Selvaratnam said, “The slaps started after we’d gotten to know each other.

“It was at first as if he were testing me. Then it got stronger and harder. It wasn’t consensual. This wasn’t sexual playacting. This was abusive, demeaning, threatening behavior.”

She said that as the violence grew, so did his sexual demands.

“He was obsessed with having a threesome and said it was my job to find a woman,” Selvaratnam said. “He said he’d have nothing to look forward to if I didn’t and would hit me until I agreed.”

In an ironic twist, Schneiderman had been at the forefront of the #MeToo movement in which he took on disgraced movie producer Harvey Weinstein, himself accused of violence towards women.

Schneiderman is also accused of hitting and choking women without their consent and referring to anti-gun demonstrators as losers, including parents from Sandy Hook Elementary School, the site of the 2012 shooting massacre.

He has since said he engaged in role playing with the women during sex but never did so without their conscent.

- Jagajeet Chiba, Gambling911.com

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