Illinois rules daily fantasy sports illegal – USA TODAY
The Illinois Attorney General has decided that DraftKings and FanDuel are conducting illegal gambling operations in that state and wants the companies to shut downÂ there unless and until the state legislature legalizes them.
The opinion was issued Wednesday by Illinois Attorney General Lisa Madigan, striking another gut punch to the daily fantasy sports industry after New York made a similar decision last month.
âAbsent legislation specifically exempting daily fantasy sports contests from the gambling provisions, it is my opinion that daily fantasy sports contests constitute illegal gambling under Illinois law,â Madigan wrote.
Madiganâs decision notes there is legislation pending in the state legislature which proposes, in part, to exempt fantasy contests from the general prohibition against gambling.
But unless and until that happens, this once-promising new industry finds itself in another troubling spot âÂ forced to fight for its lifeÂ in a big state. Other states could follow, leading the companies to ramp up lobbying efforts and appeal to their customers for grassroots support in an effort to stay viable.
Officials in Texas and California have been considering this issue, too, while New York has taken its case to court in an effort to shut them down.
FanDuel responded to the latest threat Wednesday with a statement:
“Chicago may be the best sports town in the country. Itâs a city âÂ and Illinois is a state âÂ that plays fantasy sports like almost no other. `The League’ (television show)Â is even set in Illinois. So why the Attorney General would tell her 13.5 million constituents they can’t play fantasy sports anymore as they know it âÂ and make no mistake, her opinion bans all forms of fantasy sports played for money âÂ is beyond us,” the statement said. “Hopefully the legislature will give back to the people of Illinois the games they love. A sports town like Chicago and a sports-loving state like Illinois deserves nothing less.”
FanDuel and DraftKings dominate the daily fantasy sports industry, a growing new business phenomenon in the digital age with high-profile partners and investors in pro sports and media, including the NBA, which owns a stake in FanDuel.
In exchange for an entry fee, they offer fans a chance to win big cash prizes based on the statistical performance of real-life players in real-life games. But thatâs a problem according to Illinois law, Madigan wrote.
She noted that Illinois criminal law declares that âall games of chance or skill, when played for money, are illegal gambling in Illinois, unless excepted.â
She also noted that the law âexempts only those who actually engage in a bonafide contest for the determination of skill, speed, strength, or endurance, and not a daily fantasy sports contest participant who pays a fee to build a `teamâ and who may win a prize based on the statistical performance of particular athletes.
âIn this regard, persons whose wagers depend upon how particular, selected athletes perform in actual sporting events stand in no different stead than persons who wager on the outcome of any sporting event in which they are not participants,â Madigan wrote.
The companies have argued that they are games of skill and not chance like traditional gambling.Â They also cite a 2006 federal law that cracked down on online gambling but exempted paid fantasy sports games played under certain conditions.
That law, however, doesn’t give it protection from state laws that might prohibit such games.
Before October, the companies already had decided not to operate in five states where the law was not on their side. Then Nevada declared them to be gambling operations in October, banishing them unless they got gambling licenses there. In November, New York Attorney General Eric Schneiderman followed with his effort to shut them down there.
And now Madigan of Illinois has issued her opinion after being asked about the legality of these companies by two state representatives.
Her opinion didn’t directly address the legality of traditional, season-long fantasy sports games, which alsoÂ are played for money butÂ are played over the course of a season instead of a day or a week. AsÂ FanDuel noted, her legal reasoning could apply to traditional fantasy sports games,Â too, possibly threatening a popular pastime that’s been around for decades.
By contrast, Schneiderman of New York distinguished between traditional fantasy sports and daily fantasy sports and only has tried to shut down the latter, declaring it to be illegal gambling. Traditional sports gambling is largely illegal in the U.S. outside of Nevada. But New York lawmakers also have indicated they might change the law there to protect fantasy sports.
Follow sports reporter Brent Schrotenboer on Twitter @Schrotenboer. E-mail: email@example.com