Daily fantasy betting illegal, Lisa Madigan says

SPRINGFIELD - Daily fantasy sports betting is illegal gambling under Illinois law, Attorney General Lisa Madigan said Wednesday.

Madigan's opinion, sought by two Democratic legislators points out that the debate over whether the popular contests involve skill or luck is irrelevant. Illinois outlaws both.

The law "clearly declares that all games of chance or skill, when played for money, are illegal gambling in Illinois," Madigan, a Democrat, wrote.

"In light of the opinion, we expect that both FanDuel 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 from subsection 28-l(a) of the Illinois Criminal Code of 2012," a Madigan assistant wrote in a letter to the two companies.

Madigan's decree follows decisions in New York and Nevada to ban the online sites for the same reason. Democratic Rep. Mike Zalewski of Riverside, who is pushing legislation to legalize and regulate the contests, said that while he disagrees that the pastime involves gambling, the ruling provides "more clarity."

Zalewski said in a statement that he's aiming for regulations "to allow Illinoisans to continue to play these contests and provide the necessary strong consumer protections for safe, fun play."

FanDuel released a statement Wednesday night lamenting what it said was Madigan's ban on fantasy sports betting.

"Chicago may be the best sports town in the country," said the statement, which called on lawmakers to "give back to the people of Illinois the games they love." The statement didn't say the site will cease operations in the state. A spokesman had no further comment.

Boston-based DraftKings did not respond to a request for comment but said in October that Zalewski's approach, requiring players to be 18 and allowing sites to review players for child support or tax debts, was "reasonable and measured."

Daily fantasy sports differ from the traditional model in that contests are organized around short periods - a week, or a day - instead of a season. Players compete for a predetermined prize by assembling virtual teams of real pro or college athletes; winners are determined based on the statistics those athletes compile.

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.

Nevada regulators declared the bets illegal gambling and ordered the sites out of the state unless they acquire gambling licenses; New York's attorney general ordered DraftKings and FanDuel to stop operating, but the companies won a temporary reprieve allowing them to continue through January. Madigan's opinion made no such orders.

Democratic Reps. Scott Drury of Highwood and Elgie Sims of Chicago sought the opinion. Drury said not only did taxpayers need to know whether the contests were legal, but lawmakers needed to know what they are attempting to regulate.

"To me, it didn't make sense to consider legislation when we didn't know what the current status of daily fantasy sports is in Illinois," Drury said. "Now that we know, according to the attorney general, that it's illegal, we can make a serious attempt to address the issue."

Drury is not a fan of Zalewski's proposal, saying the minimum age of 18 is too young and that rules are too loose on winners who owe child support or tax money. Zalewski said he aligned parameters with current gambling regulations on riverboat casinos and horse racing.

"I disagree with those sentiments, but we have whole spring ahead of us to work on a bill that addresses concerns like that," Zalewski said.

A spokesman for the Illinois Gaming Board wasn't immediately available to comment.

Earlier this year, Chairman Don Tracy said his staff was weighing whether the booming daily fantasy games were gambling because, if so, they would need to be regulated.

• Daily Herald Political Editor Mike Riopell contributed to this report.