Daily fantasy sites took another blow on Wednesday when Illinois Attorney General Lisa Madigan declared daily fantasy sports betting illegal gambling under state law and demanded that both FanDuel and DraftKings stop accepting payments from Illinois residents.
“Participants (in the online fantasy leagues) must pay an entry fee or buy-in amount in order to win a prize. Consequently, the act of playing daily fantasy sports contests in Illinois constitutes illegal gambling,” Madigan wrote in her 15-page opinion.
Likewise, Madigan holds the companies equally responsible in the behavior which she says violates the state’s criminal code.
“[FanDuel and DraftKings] operate websites that allow individuals to play games of chance or skills for money,” she writes. “Accordingly, entities which operate such contests commit the offense of gambling under Illinois law, unless otherwise exempted.”
Madigan sent her decision to state legislators who will now decide whether to make an exemption for the sites, which became hotbeds of scandal earlier this year when it was revealed the sites’ employees were winning large pots because they had access to insider information that the public did not.
DraftKings and FanDuel later banned its employees from playing for money, however, skepticism of the sites’ fairness still remain.
Apart from the scandal, two other states have already banned the sites from operating in their states. Nevada gaming regulators order the sites shut down in the state in October because the sites were operating without a proper gambling license. In November, New York Attorney Eric Schneiderman declared the sites illegal under the state’s gambling laws and demanded both DraftKings and FanDuel stop accepting payments from New York residents.
Wednesday’s decision made by Madigan echoes that of the previous two, but some in Illinois would like to see the sites regulated and made legal.
Democratic state Rep. Mike Zalewski of Riverside, Ill., for example, told ESPN in a statement that he’d like to see the sites up and running in his state, but said legislation is needed to “provide the necessary strong consumer protections for safe, fun play.”
DraftKings and FanDuel said they disagreed with Madigan’s decision in statements posted to their respective websites late Wednesday and early Thursday.
“We believe daily fantasy sports, which Illinois residents have been playing for years, are lawful under state law,” DraftKings counsel David Boies said on Wednesday after Madigan issued her opinion.
Boies also said the company will work with lawmakers to come up with a resolution to keep the site open, but said in the meantime that it plans to “preserve the status quo.”
FanDuel, meanwhile, did not reveal whether it plans to disallow Illinois residents from betting on its site. The company did, however, say it hopes the state legislature can come up with a solution to “give back to the people of Illinois the games they love.”
“A sports town like Chicago and a sports-loving state like Illinois deserves nothing less,” the company added.