Meetings & Information


Wednesday, June 15, 2016

FWIW: Fantasy Sports

Will fantasy sports prevail where casinos, horse racing have not?

Len Don Diego, marketing manager for content at DraftKings, a daily fantasy sports company, works at the company's offices in Boston. The daily fantasy sports industry is seeking legalization in Illinois.
 Len Don Diego, marketing manager for content at DraftKings, a daily fantasy sports company, works at the company's offices in Boston. The daily fantasy sports industry is seeking legalization in Illinois.
Associated Press/2015

By Mary Hansen
In their effort to ensure their future in Illinois, DraftKings, FanDuel and other daily fantasy sports companies have enemies in casinos and the horse racing industry, two gambling interests that have been either fighting off competition or trying to expand here for years.

Casinos, particularly the Des Plaines-based Rivers Casino, have tried to paint fantasy sports initiatives as an attempt to expand gambling in the state. The casinos have pushed for the opportunity to offer more Internet gambling themselves as a result.

If the fantasy sports companies succeed in the coming days or weeks in getting their business legalized in Illinois, they will have navigated complex politics in Springfield during a particularly difficult year. If they fail, they'll know how horse racing advocates and supporters of new casinos feel when their expansion efforts fall short.

Still, the politics of fantasy sports and traditional gaming expansion are distinct.

For one, daily fantasy sports is a relatively new industry. Supporters have to take time to explain to some how the contests work, but don't have to confront long-held opinions that lawmakers might have on traditional gambling.

Further, fantasy players across the state access the games online, and the biggest companies running the games are based out of state. This allows fantasy sports advocates to avoid contentious regional fights that casino expansion proposals often set off.

Gambling expansion plans often grow large as provisions are added to satisfy one interest or another, then sometimes collapse because they've become so huge.
State Sen. Terry Link says the two efforts are clearly different.

"Fantasy (sports) are really not what I would call an expansion of gaming," said Link, a Vernon Hills Democrat. "I look at this as clarifying something that needs to be clarified."

That's because attorneys general in 11 states, including Illinois, have ruled that the games are illegal. Attorney General Lisa Madigan issued her opinion in December, writing "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,"

DraftKings and FanDuel have responded with lawsuits and also, in the industry's quest to ensure the legality of its games, have hired dozens of lobbyists in Springfield and statehouses across the country to push regulations that allow them to continue operating.

But the lobbying presence has proved to be a liability, too.

State Rep. Rita Mayfield, a Waukegan Democrat, accused a FanDuel lobbyist of offering donations in exchange for favorable votes at a committee hearing last week. Mayfield called the move "unethical" and said she and others would not be comfortable voting on the bill.

Drafting and FanDuel's national lobbying point person categorically rejected the accusations.

The companies have been successful in getting laws passed to guarantee the games' legal status in a handful of other states, including Indiana.

Backers in Illinois have stressed that their proposal, which licenses companies, imposes some taxes, and sets the minimum age to play at 21 years, is the strongest yet.

"As long as we have constituents playing these games, it's important for us to act in the best interest of them and do our very best to create a mechanism where we have objective regulatory control over the companies," said state Rep. Mike Zalewski, a Riverside Democrat who sponsored the bill.

Supporters of the fantasy sports bill said they compromised with casino representatives and put in a clause to allow casinos to run fantasy sports games.

But casinos said this didn't go far enough, instead suggesting other online gambling games be included. Casinos sought similar allowances two years ago under a plan backed by Senate President John Cullerton. The Chicago Democrat's plan failed, a fate that could meet daily fantasy sports legislation as well.

State Rep. Scott Drury, a Highwood Democrat, said his main concerns are that the proposed regulations aren't strong enough and don't guarantee minors won't play the games.

"And then some caucuses have their own concerns," Drury said. "And usually that's not a great sign for a piece of legislation because it's hard to take care of all of those individual concerns and get the votes needed."

Shaffer: Congress wastes time with hearings on betting

Rick Shaffer Sunday, May 29, 2016

Credit: Chitose Suzuki

IN PLAY: Hub-based Draft-Kings faces allegations that a worker misused information as the state looks at the online fantasy sports industry.

Our current Congress — which is far worse than the one President Truman dubbed the “Do-Nothing” 80th Congress — recently began holding hearings on whether fantasy betting should be legal.

The need to hold hearings on this question is a blatant absurdity for three reasons.
First, betting is a fact of life in this country and when you consider all of the state lotteries, it’s clear that the government is 
already deeply involved in it.

Second, legalizing fantasy betting — and establishing reasonable regulations — is something that could easily be put into law. The taxes generated by the industry would serve to create much-needed federal and state income, not to mention the well-paying jobs fantasy betting companies are creating.

And though opponents say the industry will only worsen the country’s gambling addiction issue, the fact is compulsive gamblers will continue to bet — and overbet — legally or illegally, no matter what Congress does.

Finally, these hearings highlight how absurd the actions, or inactions, of this Congress have been.

It goes to show that this Congress has no problem wasting time holding hearings to decide if fantasy betting should be legalized — an absolute no-brainer if ever there was one — while simultaneously avoiding the critical financial matters that are threatening the very foundation and future well-being of this country.

To name just a few: the ever-growing national debt, an ever-shrinking middle class, unemployment, the skyrocketing cost of a college education, and the 
increasingly poor secondary education young people in this country are getting.

Some people are surprised that the current Congress’ approval rating fluctuates between 9 and 15 percent. Frankly, I think it’s a wonder the rating is that high.

Rick Shaffer hosts “Biz$mart” weekday afternoons from 4 to 6 on Boston Herald Radio.

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