New fantasy sports rules in other states could influence Illinois

While the White Sox and Cubs begin their seasons Monday, some dedicated baseball fans have been planning and drafting their fantasy teams for weeks.

Now, new regulations in Massachusetts, Indiana and Virginia on the booming daily fantasy sports industry could influence what rules are pitched in Illinois.

Lawmakers could debate the issue in the coming months, with a first hearing scheduled for next week.

The key for the industry is making sure the contests are legal, said Peter Schoenke, chairman of the Fantasy Sports Trading Association.

Several state attorneys general, including Lisa Madigan in Illinois, ruled last year that the contests are games of chance, which makes them gambling and illegal.

Madigan's office has been quiet on the issue since, but fantasy companies and their supporters have continued a full-court press in statehouses across the country.

"(The new rules) are all very good for the industry. They clarify that fantasy sports are legal," Schoenke said.

They also set minimum ages to play and establish fees the companies must pay to operate.

For example, players in Massachusetts must now be at least 21 years old to play, according to regulations finalized by Attorney General Maura Healy in March.

The proposal in Illinois would set the minimum age at 18, the same as in Indiana and Virginia. But state rep. Mike Zalewski, the Riverside Democrat who introduced the legislation, said he thinks the legislature should carefully consider the minimum age.

Indiana and Virginia both require a $50,000 licensing fee for fantasy companies. Illinois' proposal would not impose any taxes, though Zalewski said that could change.

"You're going to need administrative oversight (of the industry), and I think it's wise to consider a licensing fee," he said. "I worry about small businesses. I don't want to price them out of marketplace that they want to grow."

Casino industry officials say that the proposed regulations are unfair. After all, casinos pay higher tax rates and face strict oversight by state regulators, said Tom Swoik, executive director of the Illinois Casino Gaming Association.

"We think (the bill) needs to be strengthened and level the playing field with what casinos have to do," Swoik said.

Daily fantasy sports allow participants to win cash by picking a squad of their favorite players and racking up points based on their performance in games.

Because some games reset every day and lure players with the potential for big payouts, the industry has faced criticism that the websites are addictive.

For this reason, Healy set consumer protections in Massachusetts, including monthly limits on how much a player can spend on the site and rules regarding marketing. The state also requires sites to offer separate games for beginners and identify more experienced players.

Massachusetts prohibited play on college sports, but fantasy sports companies DraftKings and FanDuel agreed this week with the NCAA and others to stop offering these games.

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