DraftKings, FanDuel Banished from Illinois

Illinois becomes 8th US state to deem daily fantasy sports illegal.

Daily Fantasy Sports websites have suffered another major blow as Illinois became the latest US state to deem this kind of activity gambling, which basically means it is not legal under the state law.

Illinois Attorney General Lisa Madigan sent a letter to Judiciary – Criminal Committee Chairman Elgie R. Sims, Jr. and vice-chairman Scott R. Drury, replying to their inquiry whether the daily fantasy contests offered by FanDuel and DraftKings fall under gambling under Illinois law.

Mrs Madigan stated her opinion that DFS websites constitute illegal gambling activity and as such have no place in the state of Illinois. The Attorney General expects the two companies as well as other DFS organisers to amend their terms and conditions to add Illinois to the list of US states whose residents are banned from taking part.

Both Games of Chance and Games of Skill Illegal in Illinois

While the debate whether daily fantasy sports contests fall under games of skill of games or chance is ongoing, Madigan point out that the Illinois’ Criminal Code prohibits both “games of chance or skill for money”, while also banning any operators that run these kinds of contests.

And even though there are certain exemptions from said prohibition, the Attorney General does not believe that these can apply to the DFS companies.

The aforementioned exemptions apply to cases where contestants compete for prizes or some sort of compensation, but since the returns of DFS customers are solely based on the performances of real life athletes, Madigan believes that this scenario is no different to conventional gambling.

Illinois government has proposed legal framework that should govern DFS websites, but until the proposals are officially approved, the ban will remain in place.

Arizona, Montana, New York, Nevada, Washington, Louisiana and Iowa had previously deemed fantasy sports illegal, thus forbidding their residents to play at these websites, with Illinois set to become the eight US state to effectively see fantasy sports competitions as gambling. Texas is believed to be ready to join the list, while few other states could follow in their footsteps in years to come.

This is going to be a major hit for leading DFS operators considering the fact that Illinois accounts for 5% of the overall fantasy sports activity, with the serious decline in revenue causing serious problems to both DraftKings and FanDuel.