Thursday, December 24, 2015

Fantasy Sports - Busted in Illinois

    Yesterday, the Attorney General (AG) of the State of Illinois released an opinion that Daily Fantasy Sports constitute gambling under Illinois law (Opinion).

     There are two notable elements to this opinion.

     First, the AG directly addresses FanDuel's and DraftKings' claim that under the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA) fantasy sports are legal (see Opinion at 3-5).  While the UIGEA does exclude from the definition of "bet or wager" the participation in fantasy sports games, the AG points out that the UIGEA does not preempt existing state laws regulating gambling. 

     Second, the definition of gambling under Illinois State law covers both games of chance and games of skill (see Opinion at 6-8).  Thus, FanDuel's and DraftKings' second flagship argument -- that fantasy sports is a game of skill and thus cannot be gambling -- collapses.

     We should expect that FanDuel and DraftKings will mount legal challenges to the AG's Opinion, and will lobby the Illinois legislature to change the law.

 - HP

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