Attorney General Lisa Madigan Bans Daily Fantasy Sports in Illinois
Illinois Attorney General Lisa Madigan has ruled that daily fantasy sports is illegal under the laws of her state. In an opinion released on Wednesday, Madigan wrote, “It is my opinion that daily fantasy sports contests constitute illegal gambling under Illinois law.”
The decision is the latest hammerblow to the daily fantasy sports industry. The states of New York and Nevada ban such gaming in the past 2 months. The loss of New York was a particularly troublesome development, because it is the 4th most populous US state, behind only California, Texas, and Florida. Illinois, with nearly 13 million residents, is the 5th most populous state.
Madigan Sent Letter to DFS Companies
Lisa Madigan sent a letter to DraftKing and FanDuel, informing them of her decision and offering specific instructions for the companies. She wrote, “We expect that both Fan Duel and DraftKings will amend their Terms of Use to include Illinois as an additional state whose residents are not eligible to participate in contests unless and until the Illinois General Assembly passes legislation specifically exempting daily fantasy sports contests.”
Illinois Fantasy Sports Legislation
One piece of bright news in Madigan’s letter is a mention of legislation in the Illinois state legislature which would exempt daily fantasy sports from the ban imposed on most forms of gaming in the state.
The daily fantasy sports industry finds itself at a crossroads. With lawmakers in California and Texas each reconsidering their laws on daily fantasy sports, it is possible DraftKings and FanDuel could be fighting for the survival of their industry in the coming months and years. Less than 6 months ago, the companies were riding high, seeking billion-dollar investments from the likes of the Disney Company. Now, their survival as a legal form of gaming is in doubt.
DraftKings’ Strategy
People can expect a similar reaction in Illinois to the one the DFS industry had in New York: lawsuits and lobbying attempts. In New York, DraftKings and FanDuel filed separate lawsuits to force Eric Schneiderman to scrap plans to ban DFS gaming. Those legal filings ended up in the New York Supreme Court, where Judge Mendez ruled against them. Pending a January appeal of that decision, daily fantasy sports is illegal in the State of New York.
High-powered lawyer David Boies, who serves as legal counsel to DraftKings, released a statement on behalf of DraftKings on Wednesday.
It read, “The company intends to promptly seek a judicial resolution of its right to offer daily fantasy sports contests to Illinois residents. As it does so, it will continue to abide by all relevant laws and will follow the direction of the courts. Pending that resolution the company will preserve the status quo.”
FanDuel Statement on Madigan’s Ruling
FanDuel released a separate statement, which focused less on legalities and more on public relations. In the statement, the Scottish company’s spokesmen expressed bewonderment. It said, “So 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.”
The FanDuel missive points out something the general public in New York and Illinois might not know — it makes their local fantasy football league illegal in their states. Since the inception of fantasy sports, most US states have taken a “look the other way” approach to the gambling stakes in such league. They viewed such activity as harmless, because they were once-in-a-year wagers, much like an office pool on the Super Bowl or March Madness. Now, the states have made it strictly illegal to wager money on yearly fantasy baseball or fantasy football leagues. While no authority is likely to prosecute for such gaming, such prosecutions have happened before in other states.
FanDuel continued its statement by saying, “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.”
Lisa Madigan’s Stance on Gaming
Lisa Madigan contends that the state’s laws are clear on fantasy sports. Sweeping aside the contention that DFS is not gambling because it is a game of skill, she wrote in her opinion that “all games of chance or skill, when played for money, are illegal gambling in Illinois, unless excepted.”
Under such stark terms, fantasy sports is illegal. Hopefully, Lisa Madigan’s oblique reference to the fantasy sports legislation in the state is a spur to lawmakers in Illinois to pass legislation which clarifies fantasy sports laws in the state. If so, the daily fantasy sports industry might move forward with clear regulations and a clear path to booming industry based on America’s most popular sports hobby. It is clear now there is no path forward for FanDuel and DraftKings besides a regulated industry, so they better begin lobbying Illinois politicians to assure “daily fantasy sports” is included specifically in any Illinois law which legalizes fantasy sports in general.
