The Illinois Attorney General, Lisa Madigan, has placed a ban on the two Daily Fantasy Sports operators DraftKings and FanDuel stating that they violated state laws, this was announced after New York’s Attorney General, Eric Schneiderman, had stated that the operators were illegal gambling operators.
In response to a letter of inquiry from state representatives, Elgie Simms and Scott Drury, Ms. Madigan explained that she believed that both of the operators, FanDuel and DraftKings, and presumably other DFS operators, were operating illegal gambling under the state’s criminal code.
Ms. Madigan cited the Illinois Criminal Code 28-1(a)(12), saying that a company or a person violates the law when they are knowingly establish, maintain, or operate a internet site, that allows a person to play games skill or chance for money or any other thing of value.
Ms Madigan did say that Illinois law allowed certain exceptions to this law, and that DraftKings and FanDuel have asserted that they were included under section, which specifically states code offers an exemption to any offers of cash prizes, to actual contestants in any type of bona fide contest that is of skill, of speed, of strength, or endurance… In the letter Ms Madigan explaines that she didn’t agree that the DFS players wereare the actual contestants, and that only athletes themselves could gain that distinction.
The letter has come at a time when Illinois state legislation is looking to regulate DFS and then apply stricter rules for players.
It must be noted that the letter doesn’t directly the DFS operators to cease their operations…it is just in reply to two of the state representatives, who asked AG’s opinion on the legality of these sites. Which means the sites are not technically required to shut down until they’re are ordered to, and that has not happened yet.
Draftking’s council has responded with a statement saying that they disagree with he AG’s decision, and that they were looking forward to working together with the state with regards to the passing of new legislation regulating DFS. Council continued that they did not understand the reasoning behind this, and that they believe that the Daily Fantasy Sport is being played by residents of Illinois have bee playing for years lawfully under the state law, and believed that this was a policy question for the state legislators to address.
David Boies, who is counsel got DraftKings and the Chairman of Boies, Schiller & Flexner LLP said that they looked forwrd to working with the lawmakers, they would like to see thoughtful and common sense legislation that will protect consumers’ rights to compete, at the same time adopting the appropriate consumer protections.
The company wil seek judicial resolution of their rights to offer the Daily Fantasy Sport contests to the residents of Illinois.