Lisa Madigan Declares Daily Sports Fantasy            Betting Illegal in Illinois

If you’re an Online fantasy sports contests player you may soon find yourself guilty of breaking the law if you live in the state of Illinois.  The Online fantasy sports contests currently offered by FanDuel and DraftKings according to Illinois Attorney General Lisa Madigan, “clearly constitute gambling” and are illegal under state law, she stated  in an opinion issued earlier this week.

The 15-page opinion noted that the criminal code “prohibits the playing of both “games of chance or skill for money.'”

Madigan states further, “Participants (in the online fantasy leagues) must pay an entry fee or buy-in amount in order to win a prize. Consequently, the act of playing daily fantasy sports contests in Illinois constitutes illegal gambling.” Madigan’s declaration  was sent legislators.

Illinois Attorney General has asked  the companies to add Illinois to the list of states whose residents cannot participate in the contest, “unless and until” legislation is passed to exempt daily fantasy sport contests from “the criminal prohibition on gambling.”  

As to what will happen to the designated companies if they do not comply is not discussed. They have been put on notice however. Further how will the sate of Illinois monitor those Illinois residents who travel outside the state and participate   online? Will they be considered based on where they’re from or based on the state in which they are visiting at the time they participate (given that it is permitted in such state)? Such details come with technology . . . 

Madigan’s determination is in line with  similar decisions in other states. New York Attorney General Eric Schneiderman in November said that after a one-month investigation his office had concluded that the daily contests are essentially games of chance, not skill. Schneiderman ordered DraftKings and FanDuel to stop operating, but the companies won a temporary reprieve allowing them to continue through January. Madigan did not make such  an order.

However, she did make herself clear that  the companies must list Illinois as one of the states where participation is illegal.  How long she will give them to do so was not clear. Those who are standing on the same side of the fence like  Nevada,   declared the entities promote illegal gambling and ordered the sites out of the state unless they acquire gambling licenses.

Madigan wrote, “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.” 

In October, State Rep. Mike Zalewski, D-Riverside, introduced legislation to legalize betting on the fantasy league contests. However he  said in a statement earlier this week in response to   Madigan’s opinion, that it gives the matter “clarity” as he moves forward with legislation to “provide the necessary strong consumer protections for “safe, fun play.”

“While I do not believe daily fantasy sports involve gambling, I have explained my concern from the outset of my work that Illinois law is unclear on this issue,” Zalewski said in a statement.

Democratic Reps. Elgie Sims, of Chicago and Scott Drury, of Highwood, have examined   Madigan’s opinion closely. Drury basically  said not only did taxpayers need to know whether the contests were legal, lawmakers needed to know what they are attempting to regulate.

 Drury said, “Now that we know, according to the attorney general, that it’s illegal, we can make a serious attempt to address the issue.”

Drury does not support  Zalewski’s proposal, because he feels the minimum age of 18 is too young and that rules are too loose on winners who owe child support or tax money. Zalewski defends his aligned parameters with current gambling regulations on riverboat casinos and horse racing.

The online sports fantasy companies do not plan to go down easy. In a statement, FanDuel said “why the Attorney General would tell her 13.5 million constituents they can’t play fantasy sports anymore as they know it — and make no mistake, her opinion bans all forms of fantasy sports played for money — is beyond us.”

Boston-based DraftKings, another large operator, counsel David Boies,  said in a statement that the company intends to “seek a judicial resolution” of the matter.

“As it does so, it will continue to abide by all relevant laws and will follow the direction of the courts,” Boies said. “Pending that resolution the company will preserve the status quo.”

 The traditional fantasy sports model organizes the contests  around short periods — a week, or a day — instead of a season like daily fantasy sports online.  Daily sports online players compete for a predetermined prize by creating virtual teams of real pro or college athletes.  The stats compiled  by their chosen athletes determine the winners.