DFS Blog-Legalizing Fantasy Sports


Rep. Zalewski says legalizing Illinois fantasy sports contests will protect jobs, business and players

SPRINGFIELD — A state lawmaker says his bill to formally legalize online Illinois fantasy sports contests would protect as many 2 million Illinoisans who play, as well as small businesses that offer the games or related services.

Illinois law neither explicitly allows or forbids the games, which have participants open real-money accounts with online operators.

The fantasy teams are composed of actual athletes who are “drafted” for the fantasy match-ups, some of which can be played daily. Others are offered longer term, pitting a customer’s team’s stats against other game players over the course of an entire sports season.

The game operators keep a certain amount or “fee” for administering the enterprises and pay out the rest as prizes. Millions of people in the U.S. and Canada play the games, creating a rapidly growing, multi-billion-dollar industry.

At the moment, the question of whether fantasy sports games are gambling and therefore illegal in Illinois is up for grabs — including in the courts.

Illinois Attorney General Lisa Madigan in December issued an opinion saying contests on the fantasy sports websites constituted illegal gambling under existing state law.

Further, she said the argument over whether the contests are matters of skill or chance isn’t relevant in Illinois because state law prohibits the playing of either for money unless the contests are specifically allowed.

The attorney general did say the General Assembly could pass legislation specifically exempting daily fantasy sports contests.

Rep. Mike Zalewski’s bill, first introduced in October, would do that.

Zalewski, D-Riverside, said the legislation is not all about catering to huge fantasy sports providers, such as DraftKings and FanDuel, but also would protect people who play the games and small Illinois companies that are game providers or that offer related products, such as data services.

Illinois is now in “a legal limbo of what’s OK and what’s not OK, and that’s not acceptable when you have, by some estimates, 2 million people playing fantasy football in Illinois,” Zalewski said Thursday.

While the country’s biggest operators have sued to keep their operations up and running in Illinois, smaller fantasy sports providers are on the sidelines until there’s some clarity, said one of those operators.

“Unlike DraftKings and FanDuel, we don’t have financial backing that would allow us to take on any litigation risk, so we’ve actually stopped offering our contests in Illinois as of December,” said Tony Giordano, co-founder of SideLeague, a Chicago-based business that he said has 10 employees and was serving about 10,000 players in Illinois.

Zalewski said he’s less interested in resolving the “gambling or not gambling” or “game of skill vs. game of chance” questions than he is letting adults continue to play the games if they wish to — but with some reasonable regulation.

For instance, he said, his bill would:
•Define what what is considered daily fantasy sports in Illinois.
•Bar anyone younger than 18 from playing.
•Establish “best practices” for the industry, including limits on how often a person can play, letting the sites check players for child-support liens and establishing audit standards.
•Prohibit athletes and industry insiders from playing.

If his fellow lawmakers believe more regulations, such as those applied to the horse racing and casino industries in Illinois, are needed, Zalewski’s said he’s willing to listen.

The nature and legality of daily fantasy sports operations are being debated across the country, and not everyone’s a fan.

John Warren Kindt, a University of Illinois professor emeritus of business and legal policy, is a critic of gambling and believes fantasy sports contests are definitely gambling.

“Basically what it does is that it destabilizes economic institutions and financial institutions,” Kindt recently told Virginia lawmakers considering fantasy sports legislation.

“If we have daily fantasy sports, literally you can click your mouse lose your house, click your phone lose your home,” Kindt said, according to WAMU 88.5, American University Radio.

Anita Bedell, executive director of Illinois Church Action on Alcohol and Addiction Problems, said her organization opposes the bill.

“This is a massive expansion of gambling that will affect young people, especially young males,” said Bedell.

Today’s technology also makes online gambling a pervasive presence, she said.

People “can have it anywhere, 24 hours a day, 7 days a week, nonstop — that’s a problem,” Bedell said.

She said the Church Action stance on fantasy sports gaming remains, “Don’t rush to legalize something that is illegal and should stay that way.”

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