Illinois Attorney General Says DraftKings And FanDuel Are Illegal Under State Law

In the words of DJ Khaled: “Another One!

Jumping on the daily fantasy sports bandwagon, Illinois Attorney General Lisa Madigan has joined NY AG Eric Schneiderman in deciding that DraftKings and FanDuel violate state law.

In a letter responding to an inquiry by state representatives Elgie Simms and Scott Drury, Madigan explains that she believes both FanDuel and DraftKings (and presumably other DFS operators) constitute illegal gambling under the state’s criminal code.

Madigan notes that Illinois Criminal Code 28-1(a)(12) says a company or person violates the law when they “knowingly establishes, maintains, or operates an internet site that permits a person to play a game of chance or skill for money or other thing of value…”

However, Illinois law allows certain exceptions to this law, which Madigan says DraftKings and FanDuel assert they are included under. Specifically, the state code offers an exemption to offers of cash prizes to the “actual contestants in any bona fide contest for the determination of skill, speed, strength, or endurance…” The letter continues with Madigan essentially explaining that she doesn’t agree that DFS players are the “actual contestants”, and only athletes themselves can gain that distinction.

This letter comes in the midst of pending Illinois state legislation to regulate DFS and apply stricter rules for players.

It’s important to note that this letter doesn’t directly tell DraftKings or FanDuel to cease operation…it’s just a reply to two state representatives who wanted to know the AG’s opinion on the sites’ legality. This means the sites don’t technically have to shut down until they are directly ordered to, which hasn’t happened yet.

In response to the letter, DraftKings’ counsel released a statement saying they disagree with the AG’s decision, and are looking forward to working with the state to pass new legislation regulating DFS.

“We respectfully disagree with the Attorney General’s opinion and the reasoning behind it. We believe daily fantasy sports, which Illinois residents have been playing for years, are lawful under state law. We also believe, as the Attorney General has said, that this is a policy question for state legislators to address. That is why we look forward to working with lawmakers, like Representative Mike Zalewski and others, who wish to enact thoughtful and common-sense legislation that protects consumers’ rights to compete, while also adopting appropriate consumer protections. The company intends to promptly seek a judicial resolution of its right to offer daily fantasy sports contests to Illinois residents. As it does so, it will continue to abide by all relevant laws and will follow the direction of the courts. Pending that resolution the company will preserve the status quo.” – David Boies, counsel to DraftKings and Chairman of Boies, Schiller & Flexner LLP

In the meantime, both sites will continue to operate in Illinois, and only time will tell what the future of DFS in the prairie state.