FanDuel and DraftKings have had a rough go of it as of late, with several states investigating the daily fantasy sports activities as well as certain states deeming the activity illegal. Joining New York’s Attorney General ruling, Lisa Madigan, the Attorney General in Illinois has decided to rule DFS as illegal gambling under the current state laws. Both online DFS companies must now fight to remain in operation in the state.
Madigan made her ruling based on a portion of the Illinois Criminal Code. In her ruling, Madigan stated that DFS being considered illegal gambling has nothing to do with whether the activity is a game of skill or chance. In the section of criminal code, it states gambling is when a person knowingly plays a game of chance or skill for money or thing of value.
The code also includes language that states an Internet site that permits a person to play a game of chance or skill for money or item of value is considered gambling. Madigan says the language is straightforward and it clearly declares that all games of chance or skill, when they are played for money, are considered illegal in the state.
In the past, FanDuel and DraftKings have used the argument that the activity is one of skill to be able to prove their activity should be considered legal. However, this time, it seems the argument will not work. Both sites have now filed a complaint to counter the ruling by Madigan. DraftKings would lose their 4th largest market by being removed from operation in the state.
In response to the ruling, DraftKings stated that the decision by Madigan is about Illinois but is also so much more. DraftKings feels that if the ruling is left unchecked, it will not only affect the company in Illinois but cause a rippling effect and irreparably harm the operations of DraftKings throughout the United States.
DraftKings and FanDuel also have stated that the basis of skill connected to DFS does matter in the state. The DFS sites have cited a portion of criminal code that says those who participate in an activity that offers prizes, award or compensation to the actual contestants in any bona fide contest for the determination of skill, speed, strength or endurance…. Will not be convicted of illegal gambling.
Madigan responded that this was an invalid argument as the players of DFS are not athletes on a field and the activity could not be considered an ‘actual contestants in any bona fide contest for the determination of skill’. This argument basically sees DraftKings believing that players of DFS sites are contestants while Madigan says that the criminal code is referring to athletes.
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