How a large fantasy sports plan touches a small Elmhurst business
Brett Baker remembers when notifications about his fantasy sports teams didn't pop up on his phone.
He's been playing in an NFL fantasy league with his college friends since the mid-1990s, when the "commissioner," the friend who would organize the league, used to fax out the rosters every week.
"I would go buy a USA Today every Monday and go through the box scores," he recalls. "There were two of us in our league that fought really hard against going online. This is before I had the business."
Baker's business is Big Game Software, an Elmhurst-based tech company that develops web applications for both daily and season-long fantasy sports companies. He started it in 2006.
The landscape has changed dramatically since then, and Wednesday, state lawmakers advanced regulations on the growing industry despite concerns from the Illinois Gaming Board, the state entity that would enforce the new rules.
Under the proposal, the big players in daily fantasy sports, including FanDuel and DraftKings, could pay as much as 22.5 percent of the money they make in Illinois in state taxes. It would also set the minimum age of 21 to play the contests.
Baker develops software for some startups in the industry, and he says big fees could make it tough on them. Companies would have to pay a licensing fee between $1,500 and $50,000, based on their revenue.
The regulations are necessary because Illinoisans are already playing these games, said state Rep. Mike Zalewski, a Riverside Democrat who sponsored the legislation.
"We are faced with the choice of deciding whether we want to protect them from a reality that we know exists, and make sure they can enjoy these games in a reasonable way," he said. "Or simply try to ban them from existence and then they can go play these games, which they will, in an unregulated vacuum that we have no control over."
State Rep. Ron Sandack, a Downers Grove Republican, argues Illinois should follow what New York did and order DraftKings and FanDuel to cease operations in the state until the legal standing of the games is clarified.
"We're doing this backward and I don't think that's fair or safe," he said.
Attorney General Lisa Madigan ruled daily fantasy sports contests are illegal in Illinois, agreeing with officials in some other states that the games constitute gambling.
FanDuel and DraftKings sued over the ruling, maintaining their contests in which participants pay to pick a roster of professional athletes and rack up points based on their performance in games with the chance to win cash prizes are games of skills. They both continue to operate in the state.
"(This bill) puts gaming into people's homes. The question is should gaming be this pervasive. Specifically, we don't see a way to prevent teenagers or kids even younger from getting their parents account numbers and gaming," said Caleb Melamed, who works for the Illinois Gaming Board. Developers like Baker say they can do their best, but there's no way to guarantee minors can't play.
Baker says the hardest part for him personally is having the season-long fantasy leagues he has played as a hobby getting swept up in daily fantasy contests and regulated as gambling.
"People go to a casino to win money. People who are playing fantasy sports play because they want to be (New England Patriots Head Coach) Bill Belichick," he said. "And they win and they think they are Bill Belichick. But that's why they do it."