Illinois AG: Daily fantasy sports contests illegal gambling

In a setback to fantasy sports games played through such sites as FanDuel and DraftKings, Illinois Attorney General Lisa Madigan issued an opinion Wednesday saying that such contests are illegal gambling under state law.

Madigan’s opinion said that the argument over whether skill is required in betting on short-term fantasy-team contests is irrelevant. She points out that illegal gambling occurs when someone “plays a game of chance or skill for money.”

But Madigan noted that there is pending legislation before state lawmakers that would exempt such games from Illinois’ gambling law.

Daily fantasy sports differ from traditional fantasy contests because they are played over short periods — a week or even a day. Winners are decided on achievements of real players on virtual teams.

Riverside Democratic Rep. Mike Zalewski introduced legislation in October to legalize the contests. He said in a statement Wednesday that the opinion gives the matter “clarity” as he negotiates legislation to make daily fantasy betting “safe, fun play.”

Madigan issued the opinion at the request of State Reps. Scott Drury, D-Highwood, and Elgie Sims, D-Chicago.

Drury said on Wednesday that the ruling will help lawmakers as they draft legislation to regulate the burgeoning daily fantasy industry in similar fashion to horse racing or video poker.

“Before this, we were having the discussion without even knowing if this is even legal or not,” Drury said Wednesday.

Bills have been introduced that would carve out space for fantasy sports in current state gaming statutes, but Drury said that the most recent drafts do not do enough to ensure winnings are taxed and that children can’t play.

Daily fantasy sites have exploded in popularity in recent years. The sites have added a new twist to fantasy or “rotisserie” sports games that have existed for more than a decade.

In fantasy sports, participants assemble a roster of real-world professional or college athletes and score points based on the players’ statistical performance in actual games.

Traditionally, fantasy “team owners” have played against each other over seasons that roughly coincided with the sports seasons, with nothing more at stake than bragging rights, a more or less silly trophy, or a jackpot of pooled cash.

Daily fantasy sites have created a streamlined market where players can draft multiple fantasy teams and pit them against strangers for cash stakes, with top sites like FanDuel advertising that players might take home millions over the course of a season.

The budding industry also has come under scrutiny this year, when it was revealed that FanDuel and DraftKings employees were allegedly using inside information to rake in winnings for themselves.

Attorneys for the websites did not immediately return calls from the Chicago Sun-Times on Wednesday, but lawyers for the industry have maintained that the daily matchups are not gambling because players aren’t wagering on the outcome of the game, nor are head-to-head fantasy matchups games of chance, because winning or losing depends on their customers’ skill at selecting their teams.

Officials in Arizona, Iowa, Louisiana, Montana, Nevada, New York and Washington — and now Illinois — have disagreed.

“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,” Madigan’s opinion states.

Contributing: AP

Fantasy sports contests declared illegal gambling in Illinois