Illinois Senate Moves To Legalize Fantasy Sports, But Will Bill Die Again In House?

Dustin Gouker, June 1, 2017


Illinois’ Senate voted to legalize and regulate paid-entry fantasy sports sites — like DraftKings and FanDuel — late on Wednesday night, at the end of the scheduled legislative session.But residents of the state have seen this story before. The Senate passed a bill in 2016, only to see it die an inglorious death in the House almost exactly a year ago.

The stakes in Illinois are of course higher than other states because of an attorney general opinion declaring DFS to be illegal gambling under state law. (DraftKings and FanDuel have challenged this in court, and still operate in the state in the interim.)
The dynamics in the Illinois legislature are different this time around, however, giving more reason for optimism that Illinois could legalize DFS. And while the legislature was scheduled to adjourn yesterday, the House will be back in action in June well past the deadline.

The new DFS effort in Illinois

The bill the Senate passed — H 479 — would legalize and regulate both daily fantasy sports and online gambling. The margin was a wide one — 42-10. But why both DFS and iGaming?
The legislative machinery started moving on DFS over the weekend. But the effort was paired with online gambling, in what appears to be a move to get gaming interests in the state on board. (Previously, at least a segment of the casino industry had opposed DFS legislation.)
That the Illinois Casino Gaming Association had come off of its position of stopping any sort of DFS legalization was apparent in a statement from the group’s executive director, Tom Swoik, after H 479 passed:

“We thank the Senate for advancing a comprehensive framework that legalizes and regulates online gaming. Existing law, which prevents Illinois’ licensed operators from offering any gaming product online, has created a vacuum filled by operators of illegal websites.
“By bringing online gaming out of the shadows and into a licensed and regulated market, Illinois can garner new tax revenues and tens of millions in upfront licensing fees that can be used for classrooms, pensions and social services.”
Still, the momentum generated in the Senate could easily be stopped in the House.

The House has time to act, but will it?

After the Senate acted on DFS, the onus is now on the House. But it’s not at all clear what, if anything, that chamber will do with the hybrid bill. Last year’s DFS bill was scuttled by allegations of impropriety about lobbying on the issue. But it appears those hard feelings are in the past.
While DFS opposition via lobbying has lessened with the iGaming provisions, there’s still no guarantee it passes the House, or even comes up for a vote. Chatter out of Illinois has House Speaker Michael Madigan reluctant to even call a bill that would expand gambling in the state.
It’s also possible that a DFS-only bill could resurface. DFS is designated as a game of skill in the bill, so it’s feasible that Madigan would let such an effort happen.

However, that would then turn gaming interests that support the hybrid DFS/iGaming bill into opponents again. In turn, that might make a potential vote on just DFS dicey in the House.

Part of the dynamic of the state government is the need to pass a budget, something that the legislature and Gov. Bruce Rauner haven’t done for two years.

While DFS would create some revenue, it would be a small part of a budget that will reach nearly $40 billion, if it is passed. (DFS might be counted on to generate a few million dollars, or perhaps $5 million, depending on the tax rate and licensing fee structures adopted.)
Online gambling, on the other hand, could generate a more meaningful infusion of cash for the state in up-front fees totaling more than $100 million.

What’s next in Illinois?

Everything is on hold for at least a week. But the budget is the point of concern for the House. More from WTTW in Illinois:
“…House Speaker Michael Madigan said that the House will hold public budget hearings in June, beginning with one in Chicago on June 8.
Rauner, who frequently holds media events throughout the state, says the hearings are designed merely to manage reporters and phony headlines.”
Voting on bills — H 479 included — if it happens at all, likely won’t take place until later in the month.
So the possibility of DFS legality in Illinois isn’t dead. But it might need some help to reach the finish line.