Illinois Attorney General targets FanDuel and DraftKings

[h=2]First it was New York. Now the Attorney General in Illinois says daily fantasy sports betting is illegal.[/h] If it holds, the legal opinion issued Wednesday night would mean that FanDuel and DraftKings will need to stop accepting bets in the state.


"It is my opinion that daily fantasy sports contests constitute illegal gambling under Illinois law," wrote Lisa Madigan, the state's Attorney General.


The ruling could spark a legal battle similar to the one already underway in New York State, where New York's Attorney General Eric Schneiderman has also moved to ban the games. But Schneiderman's order has been put on hold while FanDuel and DraftKings challenge the decision.


DraftKings will quickly seek court action to allow fantasy sports to continue in Illinois according to David Boies, attorney for the site. Both DraftKings and FanDuel also said they hope the Illinois legislature will act to overturn Madigan's decision.


"We look forward to working with lawmakers ... who wish to enact thoughtful and common-sense legislation that protects consumers' rights to compete, while also adopting appropriate consumer protections," said Boies.


Legislation has been introduced in Illinois to make fantasy sports legal there.


"Chicago may be the best sports town in the country. It's a city -- and Illinois is a state -- that plays fantasy sports like almost no other," said FanDuel's statement. "So why the Attorney General would tell her 13.5 million constituents they can't play fantasy sports anymore as they know it is beyond us."
Fantasy sports are specifically defined as legal in federal law that prohibits other forms of online gambling. But states are allowed to regulate or prohibit gambling that is allowed under federal law.


In fantasy sports, players wager money by picking virtual teams of professional athletes. Winners and prizes are determined by the performance of those players in actual games played.


Typically the games were played based on a sport's full season. DraftKings and FanDuel offer daily or weekly games, and they use a large number of players to generate the entry fees needed to award big-dollar prizes.


The sites had expected to award billions of dollars in prizes this year, and had attracted hundreds of millions in investment dollars from Major League Baseball, the NBA, NHL and several NFL owners, as well as major media companies including Time Warner, owner of CNN. They had used those investor dollars to flood the airwaves with their ads.


But their success and visibility have also caused states to start to look at reining in the games.

I think they pissed off way to many people with their constant commercials over, and over, and over, and over, and over, and over, and over, and over again during the games.

Had they not flooded the market so much, and got so much attention so quickly, they wouldnt be in this position.

Had they taken it slowly, not advertised as much (the amount of times they advertised were overkill), and grew steadily, I dont think they would have gotten this much attention. And then after a few years, it wouldnt even be thought of, as they had been around long enough already and no one cared.

NFLTrends said:

I think they pissed off way to many people with their constant commercials over, and over, and over, and over, and over, and over, and over, and over again during the games.

Had they not flooded the market so much, and got so much attention so quickly, they wouldnt be in this position.

Had they taken it slowly, not advertised as much (the amount of times they advertised were overkill), and grew steadily, I dont think they would have gotten this much attention. And then after a few years, it wouldnt even be thought of, as they had been around long enough already and no one cared.

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I am so glad the government has stepped in to protect me from me. Now I am prevented from spending my time and money at DraftKing and Fanduel. Sheesh! What took them so long. Thanks government and Merry....errrrr....Happy Hollidays.

Haha!

Honestly thaought that wehn NY did it's thing last month that the dam was about to break and many states would follow = copycat, so politicians, both Dem and Rep, could stroke their ego and self -promote and advance. If a bunch of congressman and the like wanted to conjoin efforts against this they could wreak havoc. Esp worried here in Mass where new AttyGen is swooping in on this stuff but happy to announce I just made small deposit few days ago and looking fwd to weekend score>>>

they already filed lawsuits against Illinois

Illinois can't agree to a budget so all bigger lottery winnings are not getting paid, yet they kneejerk decide that DK is gambling.

Stay classy Illinois.

To try to claim that this DFS is anything other than gambling is ridiculous! That being said, I really think this is what is going to help get some form of sports betting legalized.

aceduecetrey said:

To try to claim that this DFS is anything other than gambling is ridiculous! That being said, I really think this is what is going to help get some form of sports betting legalized.

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The NFL will never get behind gambling.

wilbur said:

they already filed lawsuits against Illinois

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Daily fantasy sports powerhouse operators DraftKings and FanDuel filed separate lawsuits against Illinois Attorney General Lisa Madigan on Thursday, a day after she declared daily fantasy sports violates state gambling laws.


The companies argue that their contests are games of skill allowed by state law. They're seeking to stop Madigan from enforcing her interpretation of the law and putting them out of business in Illinois.


DraftKings attorney Randy Mastro said the suit was filed so Illinois residents who have played daily fantasy sports for years will know they can continue to "enjoy the fantasy sports games they love.''


Illinois law allows contests with prizes awarded for skill, the DraftKings lawsuit argues, and the entry fees that the company charges to participate aren't bets or wagers. Contestants use "their strategic know-how and ingenuity to select'' a winning lineup, the lawsuit states.


The DraftKings lawsuit asks the court for an expedited opinion declaring that fantasy games do not constitute gambling by Illinois law and nullifying Madigan's Wednesday opinion letter.


Madigan's action "has set off a chain of events that -- if unchecked -- will unjustly destroy a legitimate industry,'' the DraftKings lawsuit filed in Cook County Circuit Court in Chicago contends. The Illinois decree followed decisions in New York and Nevada to ban the online sites for the same reason.
A Madigan spokeswoman said the attorney general's office would have no comment on the companies' lawsuits outside of Wednesday's opinion. The courts were closed Thursday evening for the Christmas holiday.


New York-based FanDuel teamed with Head2Head Sports LLC., a company that offers season-long fantasy games among its products, in the Thursday complaint against Madigan filed in Sangamon County Circuit Court. The state capital of Springfield is located in Sangamon County, and state lawmakers there will consider a measure to regulate the contests.
For the most part, states reviewing the legality of daily fantasy sports have avoided addressing the season-long version of fantasy sports.


FanDuel's complaint seeks injunctive relief to prevent the attorney general from banning the sites in Illinois. Madigan has asked DraftKings and FanDuel to amend their terms of use to include Illinois as a banned state. As of Thursday evening, Boston-based DraftKings said on its site that residents in Arizona, Iowa, Louisiana, Montana, Nevada and Washington are ineligible for prizes. According to industry research firm Eilers Research, Illinois has one of the largest daily fantasy player bases in the nation. Illinois residents make up 10 percent of DraftKings customers, according to the court filing.


In a statement, FanDuel said it disagrees with Madigan's opinion and asks a court to "confirm that fantasy sports are lawful under current law and give clarity to the millions of fantasy sports players in Illinois."


"For now, we intend to continue offering play in Illinois until there has been a decision from a court on our lawsuit," the FanDuel statement said.


In her opinion letter, Madigan pointed out that while state law allows prizes or compensation for "actual contestants," that doesn't include fantasy gamblers.


"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 wrote.


Democratic Rep. Mike Zalewski of Riverside is pushing legislation to legalize and regulate the contests. His proposal would require players to be 18 and allow sites to review players for child support or tax debts.


ESPN Chalk's David Purdum and The Associated Press contributed to this report.

FairWarning said:

The NFL will never get behind gambling.

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You do not think at all that they have enjoyed the extra money from DFS? I am hoping that they like the extra revenue and don't stand against it when it is classified as gambling.

aceduecetrey said:

You do not think at all that they have enjoyed the extra money from DFS? I am hoping that they like the extra revenue and don't stand against it when it is classified as gambling.

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Maybe they could use the money to build their own stadiums hno: no they wouldn't do that

I think Draftkings and Fanduel have taken the wrong approach. When congress allowed fantasy sports to be legal, season long fantasy was the only game going. Then along came dfs thinking they had immunity. One thing they never took into consideration is the fact that states are not bound by this "loophole". The dfs sites keep pointing to the skill vs chance argument, but in many states this doesn't even come into play when determining whether or not something is considered gambling. Most reasonable people would agree that dfs is just another form of gambling. Instead of wasting all their time and money on the gambling issue, they should be working and lobbying for "reasonable" regulations that will allow for dfs to be legal. This is only starting to happen as it becomes banned in some states, because now they have no choice but to turn the legislature. Of course one of the underlying issues for theses execs is that regulation = less money for them. More and more states want legalized gambling on sports. Dfs could potentially open the door to sports betting, but these guys seem to repeatedly shoot themselves in the foot.

aceduecetrey said:

You do not think at all that they have enjoyed the extra money from DFS? I am hoping that they like the extra revenue and don't stand against it when it is classified as gambling.

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Of course they want the revenue. They also don't want their games questioned if traditional gambling is legalized. There is a major stigma associated with gambling. Look at the shadiness of world soccer.

FairWarning said:

Of course they want the revenue. They also don't want their games questioned if traditional gambling is legalized. There is a major stigma associated with gambling. Look at the shadiness of world soccer.

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Honest question... With the "shadiness" of world soccer, is it hurting it's ratings/revenue?