Illinois attorney general says DFS constitutes gambling

Two weeks after a New York Supreme Court judge ruled that fantasy sports were against the law, the hammer came down again last week, this time in the fourth-largest market, when the Illinois attorney general said DFS constituted illegal gambling under the state's law.

In a written opinion released two days before Christmas, Illinois attorney general Lisa Madigan explained that it does not matter if DFS involves "luck or skill" since state law prohibits both.

"Absent legislation specifically exempting daily fantasy sports contests from the gambling provisions, it is my opinion that daily fantasy sports contests constitute illegal gambling under Illinois law," she wrote.

Madigan, a Democrat, also sent letters to the two industry giants – DraftKings and FanDuel – saying she expected both sites to cease operations in Illinois.

Both companies responded with statements condemning Madigan's opinion.

"Chicago may be the best sports town in the country," FanDuel said in a statement posted on its website. "So why the attorney general would tell her 13.5 million constituents they can't play fantasy sports anymore as they know it – and make no mistake, her opinion bans all forms of fantasy sports played for money – is beyond us. Hopefully the legislature will give back to the people of Illinois the games they love."

DraftKings attorney David Boies said in a statement that his client "respectfully disagreed" with the 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 commonsense 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."

Zalewski, who introduced a regulatory bill for daily fantasy sports back in October, posted his reaction to Madigan's opinion on his Facebook page, saying, "I greatly respect the Attorney General's work as a consumer champion. While I do not believe daily fantasy sports involve gambling, I have explained my concern from the outset of my work that Illinois law is unclear on this issue.

"Now that we have more clarity, I look forward to working with all involved in the upcoming legislative session to allow Illinoisans to continue to play these contests and provide the necessary strong consumer protections for safe, fun play."

Eilers Research estimates that there are nearly 200,000 unique paying DFS players in Illinois, which is around 5% of the total user base, and which makes it the fourth-largest state for DFS activity, following California, New York and Florida.