9 ms·

NY Attorney General Tells Daily Fantasy Sports to Stop Taking Bets in the State

62 points by Amorymeltzer 11y ago

slg 11y ago
That brings the list of states with outright bans to Arizona, Iowa, Louisiana, Montana, Nevada, New York, and Washington. That is a rather diverse set of states that probably wouldn't appear together on many other lists. By my rough math, they also amounts to roughly 15% of the US population that DraftKings and FanDuel are unable to accept money from. These companies have to be in full crisis mode at this point and it is hard to imagine they exist in the same form a year from now without some major reform.
- rhino369 11y ago
  This isn't really an outright ban. More like, the NY government thinks it's illegal. In order to actually stop them, the government has to prove it is illegal in court. My guess is that a these companies will stand and fight. If they let NY shut them down, they are done.
  - slg 11y ago
    IANAL and could be completely wrong on this, but I thought a judge would have to issue a temporary stay for them to continue without the threat of some sort of retroactive penalty for violating the cease and desist.
    - rhino369 11y ago
      I am lawyer but I'm not sure how the specific laws work. But generally, yes, if a court eventually says that they were breaking the law the entire time they would have retroactive damages. However, I don't think those retroactive damages would stop at the date the AG sent the letter. I think it would go back to when they started to the illegal activity or the statute of limitations. But maybe NY has some sort of notice rule for this sort of thing.
      - slg 11y ago
        Interesting, that does make sense from a legal perspective. If you do something illegal you shouldn't need a letter from the Attorney General to tell you it was illegal before you could be punished. Although I imagine that the level of cooperation these companies provide would have some impact on any potential punishment if it were to come to that.
        rhino369 11y ago
        Yes, often the company will negotiate with the AG's office on a settlement. Being cooperative goes a long way.
  - bradleyjg 11y ago
    The letter threatens criminal prosecution as well as civil litigation. If the companies continued while awaiting a ruling they risk company destroying criminal penalties (under the state's RICO analog) and the executives risk going to prison. Sure, that could have happened even without a letter, but ignoring it is daring them to do it.
- bcoates 11y ago
  NYAG is mostly in the business of shaking companies down but not killing the golden goose. Presumably this is an opening salvo that will end in them making some token changes to their business to be declared in compliance with the law and paying out a large settlement in lieu of prosecution for their previous activities. This function of the office was perfected by Spitzer but it's been cheerfully carried on by his successors.
- bko 11y ago
  As a New York resident, the state embarrasses me regularly in terms of the amount of personal liberty the politicians are willing to trample. Between Senator Schumer, Attorney General Schneiderman and New York Mayor DeBlasio, I honestly don't know who is the worst. Schumer's ban requests include powdered caffeine [0], certain flavors of e-cigarettes [1] to Bitcoin [2]. Schniederman strikes me as someone more interested in extorting companies. His most recent subpoena Exxon for not speaking out about climate change to their investors (??) is his most recent campaign [3]. I'm guessing he wants to buy more iPads for the police department [4] DeBlasio has an axe to grind against Uber [5] and costumed characters in Time Square [6] . What a joke that this qualifies as progress. Sorry, rant over. [0] http://www.schumer.senate.gov/newsroom/press-releases/following-several-tragic-deaths-schumer-calls-on-the-fda-to-ban-powdered-caffeine_one-teaspoon-of-concentrated-powdered-caffeine-is-equivalent-to-25-cups-of-coffee-and-is-highly-dangerous-for-teens--young-adults- http://www.schumer.senate.gov/newsroom/press-releases/follow... [1] http://www.nbcnewyork.com/news/local/Schumer-Calls-for-FDA-Ban-on-Candy-Flavor-E-Cigarettes-301376931.html http://www.nbcnewyork.com/news/local/Schumer-Calls-for-FDA-B... [2] http://www.forbes.com/sites/andygreenberg/2014/02/26/senator-calls-for-bitcoin-ban-in-letter-to-financial-regulators/ http://www.forbes.com/sites/andygreenberg/2014/02/26/senator... [3] http://www.bloombergview.com/articles/2015-11-10/schneiderman-s-dangerous-crusade-against-exxon-mobil http://www.bloombergview.com/articles/2015-11-10/schneiderma... [4] http://blogs.wsj.com/metropolis/2015/05/01/french-bank-settlement-to-fund-nyc-criminal-justice-initiatives/ http://blogs.wsj.com/metropolis/2015/05/01/french-bank-settl... [5] http://www.nytimes.com/2015/07/23/nyregion/de-blasio-administration-dropping-plan-for-uber-cap-for-now.html?_r=0 http://www.nytimes.com/2015/07/23/nyregion/de-blasio-adminis... [6] http://www1.nyc.gov/office-of-the-mayor/news/570-15/mayor-de-blasio-city-task-force-curb-topless-individuals-costumed-characters-times http://www1.nyc.gov/office-of-the-mayor/news/570-15/mayor-de...
  - tn13 11y ago
    And I am surprised that NY people vote for these kind of scums again and again.
  - Spooky23 11y ago
    Why should normal bookies be prosecuted and jailed when a big corporate entity flaunts their lawbreaking? Doing something on the internet shouldn't be carte Blanche for breaking any law deemed inconvenient.
- warfangle 11y ago
  Nevada isn't banning them. It's requiring that they apply for a gambling license.
chollida1 11y ago
This decision baffles me. What possible benefit to New Yorkers is there to not allow them to take bets, if things like state lotteries are still legal? We let people drink and smoke but people can't enjoy putting money on fantasy sports. I'm not in the state, but I'd consider myself a power user of those sites, so perhaps I'm only disappointed that alot of easy money just left the system. If these sites didn't have the people(NFL and Jerry Jones) and money(see people) behind them that they do, I'd be a bit more worried about their future. Is this just some state's working on an endgame to be able to tax fantasy sports revenue that comes from their states? This is the same state that outlawed pinball until someone proved that it was a game of skill. http://www.slate.com/blogs/atlas_obscura/2015/05/29/pinball_was_banned_in_new_york_until_a_single_miraculous_shot_convinced.html http://www.slate.com/blogs/atlas_obscura/2015/05/29/pinball_... That's it, its time I took this into my own hands, and went on a major winning spree to prove that fantasy football and hockey are really games of skill and not chance:)
- JonFish85 11y ago
  Is it about that specifically, or is it that the states are forcing these websites to play by the same rules as everyone else? Ignoring laws that everyone else has to play by is something that has worked so far for Airbnb and Uber but apparently something like gambling is a bit more clear cut.
  - tikhonj 11y ago
    The two aren't mutually exclusive. If they are just forcing them to "play by the same rules", Chollida's question just becomes "why are the rules in the state stacked against gambling?", with the rest of the question unchanged. It's perfectly possible to fairly enforce unfair (and/or fair but counterproductive) rules, but that on its own doesn't justify it. Viewed this way, these companies are then just engaging in something like constructive noncompliance.
    - JonFish85 11y ago
      That is an entirely different question, but the answer probably isn't that anyone can ignore inconvenient laws under the guise of "It's unjust"
swang 11y ago
Welcome to the online poker world ~4 years ago. The only difference (and the question is, 'will this be enough to keep it alive?') is that DFS has the backing of sports leagues (MLB, NFL) that have big lobby groups who can "influence" politicians. Doesn't matter how much money you have if you don't have this influence. IANAL so correct me if I'm wrong, but assuming DFS sites challenges citing that banks can legally take their transactions (through the UIGEA and thus, "not gambling"), wouldn't NY need to pass a law to bar DFS in the state?
- rcarrigan87 11y ago
  Poker was a little different. They were violating some major banking laws with how they were doing deposits. Also the companies were overseas...
rdtsc 11y ago
Hmm interesting take on things: --- “It is clear that DraftKings and FanDuel are the leaders of a massive, multibillion-dollar scheme intended to evade the law and fleece sports fans across the country,” --- Also I guess a site served from another state considered to be "in state" according to their interpretation. I wonder if these sites can tacitly (hint, hint, wink, wink) nudge their users to put in a different state in their profiles. With a disclaimer and all or just simply make everyone pick a state but remove the states that disallow it. Let users "figure it out".
komaromy 11y ago
It'd be nice if more reporting on the subject highlighted the absurdity of DFS being legal but betting on game outcomes illegal. I think that DFS should be legal but at least the NY AG is being consistent in enforcement.
- eric_h 11y ago
  The amusing thing is that they're quoting the fact that 1% of players win most of the money and therefore DFS is gambling. I'd argue that the fact that 1% win most of the time is the strongest signal that it's a game of skill (assuming it's the same 1%).
  - makomk 11y ago
    Due to the way these are structured the main "skill", so to speak, is apparently figuring out what bets other people have made so that you can make different bets, because unpopular bets have a better expected payout than popular ones. That's why most of the profits go to industry insiders who understand what kind of players people bet on.
    - eric_h 11y ago
      Given the information we have, it's certainly possible that some of that one percent used insider information. Nevertheless, given the number of players that draft kings and fan duel have acquired through their indefatigable marketing campaigns, I would submit that a not insignificant portion (if not a majority) of that one percent figure out the bets others wouldn't make all on their own. Further, math and computers can most certainly help with this given that all the relevant data is public. How long 'til this goes the way of HFT in the stock market?
deleted 11y ago
[deleted]
- irishcoffee 11y ago
  The AG literally said that fanduel/draftkings did not need to cease operations. They just cant accept money from NY residents. FD/DK both have free games.
  - downandout 11y ago
    If they are based in New York, and it's illegal in New York, then...it's illegal for them to operate in the state. They can move out of the state and operate from there in other states where it's legal, but they can't operate in the state.
    - irishcoffee 11y ago
      "do not need to cease operations" Are you a lawyer? I hope not
      - downandout 11y ago
        First, I read the letter to Fanduel and it says no such thing. Second, when something is illegal in a state, then it's illegal in the state. If the manufacture of alcohol were illegal in New York, it wouldn't be legal to manufacture it there as long as it wasn't distributed to New York residents. If fantasy sports is illegal in New York, then all aspects of it are illegal, whether it is running the operation there or offering it to the residents of the state. I am just saying that FanDuel needs to move its offices out of New York. They don't need to cease operations.
        irishcoffee 11y ago
        The AG said FD/DK could continue operations. The AG said that they could not accept money from NY residents. These are two different things, and you're conflating them. To use your analogy: The manufacture of alcohol is legal in NY, they just cant sell it in NY. Are you avoiding realizing this comparison on purpose?
GalacticDomin8r 11y ago
I'm all for this simply to get the commercials off the air. I was almost missing the constant barrage of cell phones and insurance providers. I had the sense they knew this was coming and that's why they hit the advertising so hard. If they can get enough momentum, they can make it legal.
gefh 11y ago
Excellent news. These sites prey on the people who can least afford to lose and as the article noted seriously misrepresent the chances of winning. Shame on the NFL for their involvement.
flint 11y ago
What disruptive technology is disrupting is not markets, but government.
- teej 11y ago
  In what way is daily fantasy sports gambling "disruptive technology"?
  - GalacticDomin8r 11y ago
    In the $2,000,000,000/yr way and in the "Getting Disney to be part owner in a gambling site" way.
    - ubernostrum 11y ago
      Well, there may also be the "new ways to commit insider trading" way, depending on how that story turns out.
flint 11y ago
What disruptive technology is disrupting is not markets, but government.
bbanyc 11y ago
New York's state constitution bans all unauthorized gambling and restricts the types of authorized gambling to (1) the state lottery, (2) parimutuel betting on horse races, (3) bingo and raffles by charitable organizations, and (4) no more than seven casino licenses. (I remember this from when the casino amendment was proposed; I voted against it because arbitrarily limiting the number of licenses stunk of corruption. If you're going to legalize gambling just legalize it all the way.) Without a constitutional amendment, which in New York requires the approval of two consecutive legislatures to pass, it looks like daily fantasy is dead in this state.
rdlecler1 11y ago
This chance/skill argument could be made for the financial markets.
- wpietri 11y ago
  The distinction with financial markets is that they are enablers of useful economic activity. Years ago I worked for financial traders in Chicago, home to a lot of commodities markets. Thousands of people traded futures and options on those markets. But every winter, there was also the Chicago snow markets, where those same traders would illegally trade futures and options on how much snow would fall each month at O'Hare airport. It was illegal because it was not a CFTC-regulated market; it was just a gambling operation that happened to use financial lingo to make the best more interesting. Interestingly, I see that decades later a legal snow market was actually launched: http://openmarkets.cmegroup.com/4967/a-market-for-snow-how-some-businesses-use-futures-to-prepare-for-winter http://openmarkets.cmegroup.com/4967/a-market-for-snow-how-s... Here, though they had found a legitimate purpose: it let people with snow-related expenses insure themselves against excessive snow-related expenses.

62 points by Amorymeltzer 11y ago

slg 11y ago

That brings the list of states with outright bans to Arizona, Iowa, Louisiana, Montana, Nevada, New York, and Washington. That is a rather diverse set of states that probably wouldn't appear together on many other lists. By my rough math, they also amounts to roughly 15% of the US population that DraftKings and FanDuel are unable to accept money from. These companies have to be in full crisis mode at this point and it is hard to imagine they exist in the same form a year from now without some major reform.

rhino369 11y ago
This isn't really an outright ban. More like, the NY government thinks it's illegal. In order to actually stop them, the government has to prove it is illegal in court. My guess is that a these companies will stand and fight. If they let NY shut them down, they are done.
- slg 11y ago
  IANAL and could be completely wrong on this, but I thought a judge would have to issue a temporary stay for them to continue without the threat of some sort of retroactive penalty for violating the cease and desist.
  - rhino369 11y ago
    I am lawyer but I'm not sure how the specific laws work. But generally, yes, if a court eventually says that they were breaking the law the entire time they would have retroactive damages. However, I don't think those retroactive damages would stop at the date the AG sent the letter. I think it would go back to when they started to the illegal activity or the statute of limitations. But maybe NY has some sort of notice rule for this sort of thing.
    - slg 11y ago
      Interesting, that does make sense from a legal perspective. If you do something illegal you shouldn't need a letter from the Attorney General to tell you it was illegal before you could be punished. Although I imagine that the level of cooperation these companies provide would have some impact on any potential punishment if it were to come to that.
      - rhino369 11y ago
        Yes, often the company will negotiate with the AG's office on a settlement. Being cooperative goes a long way.
- bradleyjg 11y ago
  The letter threatens criminal prosecution as well as civil litigation. If the companies continued while awaiting a ruling they risk company destroying criminal penalties (under the state's RICO analog) and the executives risk going to prison. Sure, that could have happened even without a letter, but ignoring it is daring them to do it.
bcoates 11y ago
NYAG is mostly in the business of shaking companies down but not killing the golden goose. Presumably this is an opening salvo that will end in them making some token changes to their business to be declared in compliance with the law and paying out a large settlement in lieu of prosecution for their previous activities. This function of the office was perfected by Spitzer but it's been cheerfully carried on by his successors.
bko 11y ago
As a New York resident, the state embarrasses me regularly in terms of the amount of personal liberty the politicians are willing to trample. Between Senator Schumer, Attorney General Schneiderman and New York Mayor DeBlasio, I honestly don't know who is the worst. Schumer's ban requests include powdered caffeine [0], certain flavors of e-cigarettes [1] to Bitcoin [2]. Schniederman strikes me as someone more interested in extorting companies. His most recent subpoena Exxon for not speaking out about climate change to their investors (??) is his most recent campaign [3]. I'm guessing he wants to buy more iPads for the police department [4] DeBlasio has an axe to grind against Uber [5] and costumed characters in Time Square [6] . What a joke that this qualifies as progress. Sorry, rant over. [0] http://www.schumer.senate.gov/newsroom/press-releases/following-several-tragic-deaths-schumer-calls-on-the-fda-to-ban-powdered-caffeine_one-teaspoon-of-concentrated-powdered-caffeine-is-equivalent-to-25-cups-of-coffee-and-is-highly-dangerous-for-teens--young-adults- http://www.schumer.senate.gov/newsroom/press-releases/follow... [1] http://www.nbcnewyork.com/news/local/Schumer-Calls-for-FDA-Ban-on-Candy-Flavor-E-Cigarettes-301376931.html http://www.nbcnewyork.com/news/local/Schumer-Calls-for-FDA-B... [2] http://www.forbes.com/sites/andygreenberg/2014/02/26/senator-calls-for-bitcoin-ban-in-letter-to-financial-regulators/ http://www.forbes.com/sites/andygreenberg/2014/02/26/senator... [3] http://www.bloombergview.com/articles/2015-11-10/schneiderman-s-dangerous-crusade-against-exxon-mobil http://www.bloombergview.com/articles/2015-11-10/schneiderma... [4] http://blogs.wsj.com/metropolis/2015/05/01/french-bank-settlement-to-fund-nyc-criminal-justice-initiatives/ http://blogs.wsj.com/metropolis/2015/05/01/french-bank-settl... [5] http://www.nytimes.com/2015/07/23/nyregion/de-blasio-administration-dropping-plan-for-uber-cap-for-now.html?_r=0 http://www.nytimes.com/2015/07/23/nyregion/de-blasio-adminis... [6] http://www1.nyc.gov/office-of-the-mayor/news/570-15/mayor-de-blasio-city-task-force-curb-topless-individuals-costumed-characters-times http://www1.nyc.gov/office-of-the-mayor/news/570-15/mayor-de...
- tn13 11y ago
  And I am surprised that NY people vote for these kind of scums again and again.
- Spooky23 11y ago
  Why should normal bookies be prosecuted and jailed when a big corporate entity flaunts their lawbreaking? Doing something on the internet shouldn't be carte Blanche for breaking any law deemed inconvenient.
warfangle 11y ago
Nevada isn't banning them. It's requiring that they apply for a gambling license.

chollida1 11y ago

This decision baffles me. What possible benefit to New Yorkers is there to not allow them to take bets, if things like state lotteries are still legal? We let people drink and smoke but people can't enjoy putting money on fantasy sports. I'm not in the state, but I'd consider myself a power user of those sites, so perhaps I'm only disappointed that alot of easy money just left the system. If these sites didn't have the people(NFL and Jerry Jones) and money(see people) behind them that they do, I'd be a bit more worried about their future. Is this just some state's working on an endgame to be able to tax fantasy sports revenue that comes from their states? This is the same state that outlawed pinball until someone proved that it was a game of skill. http://www.slate.com/blogs/atlas_obscura/2015/05/29/pinball_was_banned_in_new_york_until_a_single_miraculous_shot_convinced.html http://www.slate.com/blogs/atlas_obscura/2015/05/29/pinball_... That's it, its time I took this into my own hands, and went on a major winning spree to prove that fantasy football and hockey are really games of skill and not chance:)

JonFish85 11y ago
Is it about that specifically, or is it that the states are forcing these websites to play by the same rules as everyone else? Ignoring laws that everyone else has to play by is something that has worked so far for Airbnb and Uber but apparently something like gambling is a bit more clear cut.
- tikhonj 11y ago
  The two aren't mutually exclusive. If they are just forcing them to "play by the same rules", Chollida's question just becomes "why are the rules in the state stacked against gambling?", with the rest of the question unchanged. It's perfectly possible to fairly enforce unfair (and/or fair but counterproductive) rules, but that on its own doesn't justify it. Viewed this way, these companies are then just engaging in something like constructive noncompliance.
  - JonFish85 11y ago
    That is an entirely different question, but the answer probably isn't that anyone can ignore inconvenient laws under the guise of "It's unjust"

swang 11y ago

Welcome to the online poker world ~4 years ago. The only difference (and the question is, 'will this be enough to keep it alive?') is that DFS has the backing of sports leagues (MLB, NFL) that have big lobby groups who can "influence" politicians. Doesn't matter how much money you have if you don't have this influence. IANAL so correct me if I'm wrong, but assuming DFS sites challenges citing that banks can legally take their transactions (through the UIGEA and thus, "not gambling"), wouldn't NY need to pass a law to bar DFS in the state?

rcarrigan87 11y ago
Poker was a little different. They were violating some major banking laws with how they were doing deposits. Also the companies were overseas...

rdtsc 11y ago

Hmm interesting take on things: --- “It is clear that DraftKings and FanDuel are the leaders of a massive, multibillion-dollar scheme intended to evade the law and fleece sports fans across the country,” --- Also I guess a site served from another state considered to be "in state" according to their interpretation. I wonder if these sites can tacitly (hint, hint, wink, wink) nudge their users to put in a different state in their profiles. With a disclaimer and all or just simply make everyone pick a state but remove the states that disallow it. Let users "figure it out".

komaromy 11y ago

It'd be nice if more reporting on the subject highlighted the absurdity of DFS being legal but betting on game outcomes illegal. I think that DFS should be legal but at least the NY AG is being consistent in enforcement.

eric_h 11y ago
The amusing thing is that they're quoting the fact that 1% of players win most of the money and therefore DFS is gambling. I'd argue that the fact that 1% win most of the time is the strongest signal that it's a game of skill (assuming it's the same 1%).
- makomk 11y ago
  Due to the way these are structured the main "skill", so to speak, is apparently figuring out what bets other people have made so that you can make different bets, because unpopular bets have a better expected payout than popular ones. That's why most of the profits go to industry insiders who understand what kind of players people bet on.
  - eric_h 11y ago
    Given the information we have, it's certainly possible that some of that one percent used insider information. Nevertheless, given the number of players that draft kings and fan duel have acquired through their indefatigable marketing campaigns, I would submit that a not insignificant portion (if not a majority) of that one percent figure out the bets others wouldn't make all on their own. Further, math and computers can most certainly help with this given that all the relevant data is public. How long 'til this goes the way of HFT in the stock market?

deleted 11y ago

[deleted]

irishcoffee 11y ago
The AG literally said that fanduel/draftkings did not need to cease operations. They just cant accept money from NY residents. FD/DK both have free games.
- downandout 11y ago
  If they are based in New York, and it's illegal in New York, then...it's illegal for them to operate in the state. They can move out of the state and operate from there in other states where it's legal, but they can't operate in the state.
  - irishcoffee 11y ago
    "do not need to cease operations" Are you a lawyer? I hope not
    - downandout 11y ago
      First, I read the letter to Fanduel and it says no such thing. Second, when something is illegal in a state, then it's illegal in the state. If the manufacture of alcohol were illegal in New York, it wouldn't be legal to manufacture it there as long as it wasn't distributed to New York residents. If fantasy sports is illegal in New York, then all aspects of it are illegal, whether it is running the operation there or offering it to the residents of the state. I am just saying that FanDuel needs to move its offices out of New York. They don't need to cease operations.
      - irishcoffee 11y ago
        The AG said FD/DK could continue operations. The AG said that they could not accept money from NY residents. These are two different things, and you're conflating them. To use your analogy: The manufacture of alcohol is legal in NY, they just cant sell it in NY. Are you avoiding realizing this comparison on purpose?

GalacticDomin8r 11y ago

I'm all for this simply to get the commercials off the air. I was almost missing the constant barrage of cell phones and insurance providers. I had the sense they knew this was coming and that's why they hit the advertising so hard. If they can get enough momentum, they can make it legal.

gefh 11y ago

Excellent news. These sites prey on the people who can least afford to lose and as the article noted seriously misrepresent the chances of winning. Shame on the NFL for their involvement.

flint 11y ago

What disruptive technology is disrupting is not markets, but government.

teej 11y ago
In what way is daily fantasy sports gambling "disruptive technology"?
- GalacticDomin8r 11y ago
  In the $2,000,000,000/yr way and in the "Getting Disney to be part owner in a gambling site" way.
  - ubernostrum 11y ago
    Well, there may also be the "new ways to commit insider trading" way, depending on how that story turns out.

flint 11y ago

What disruptive technology is disrupting is not markets, but government.

bbanyc 11y ago

New York's state constitution bans all unauthorized gambling and restricts the types of authorized gambling to (1) the state lottery, (2) parimutuel betting on horse races, (3) bingo and raffles by charitable organizations, and (4) no more than seven casino licenses. (I remember this from when the casino amendment was proposed; I voted against it because arbitrarily limiting the number of licenses stunk of corruption. If you're going to legalize gambling just legalize it all the way.) Without a constitutional amendment, which in New York requires the approval of two consecutive legislatures to pass, it looks like daily fantasy is dead in this state.

rdlecler1 11y ago

This chance/skill argument could be made for the financial markets.

wpietri 11y ago
The distinction with financial markets is that they are enablers of useful economic activity. Years ago I worked for financial traders in Chicago, home to a lot of commodities markets. Thousands of people traded futures and options on those markets. But every winter, there was also the Chicago snow markets, where those same traders would illegally trade futures and options on how much snow would fall each month at O'Hare airport. It was illegal because it was not a CFTC-regulated market; it was just a gambling operation that happened to use financial lingo to make the best more interesting. Interestingly, I see that decades later a legal snow market was actually launched: http://openmarkets.cmegroup.com/4967/a-market-for-snow-how-some-businesses-use-futures-to-prepare-for-winter http://openmarkets.cmegroup.com/4967/a-market-for-snow-how-s... Here, though they had found a legitimate purpose: it let people with snow-related expenses insure themselves against excessive snow-related expenses.