DraftKings, FanDuel File Lawsuit Against Illinois Attorney General

DraftKings and FanDuel have not-so-jolly Christmas presents for the attorney general of Illinois: a pair of lawsuits. The daily fantasy sports operators filed separate lawsuits against Illinois Attorney General Lisa Madigan after she said daily fantasy sports violated gambling laws in the state, ESPN reported.

“We disagree with the [attorney general’s] opinion and today filed a lawsuit to ask a court to decide the issue, confirm that fantasy sports are lawful under current law, and give clarity to the millions of fantasy sports players in Illinois,” FanDuel said in a statement Thursday. “For now, we intend to continue offering play in Illinois until there has been a decision from a court on our lawsuit.”

DraftKings also plans to continue operating until it has reached a legal resolution with Illinois, USA Today reported. The two companies argue their daily fantasy sports contests are games of skill, which are allowed under Illinois law, and the lawsuits say the entry fees are not bets or wagers.

Contestants use “their strategic know-how and ingenuity to select” a successful lineup, the DraftKings lawsuit states, according to ESPN. The suit asks the court for an expedited opinion stating fantasy sports games do not constitute gambling to void Madigan’s Wednesday letter.

The Illinois lawsuits come after similar battles in New York and Nevada, as those states have also banned daily fantasy sports for violating gambling laws. Both DraftKings and FanDuel sued New York Attorney General Eric Schneiderman last month and are still fighting to be allowed to operate there.

“The attorney general's opinion, if left unchecked, will not only force DraftKings to exit the state, but also have a ripple effect, irreparably banning DraftKings' operations throughout the nation and causing it to lose customer goodwill that can never be restored,” the DraftKings lawsuit says, according to USA Today.

Madigan has asked the companies to add Illinois to their lists states from which they are banned, and state lawmakers will consider a measure to regulate fantasy sports contests, ESPN reported. As of Friday morning, DraftKings said on its site residents in Arizona, Iowa, Louisiana, Montana, Nevada and Washington were ineligible for prizes. Illinois accounts for 10 percent of DraftKings customers, the company’s court filing said, and research firm Eilers Research found Illinois has one of the largest daily fantasy player bases in the country, ESPN reported.

The season-long fantasy game operator Head2Head Sports LLC joined FanDuel in its complaint in Illinois. So far, most states have avoided ruling on season-long versions of fantasy sports.

This is the third month in a row that states have decided to regulate or ban daily sports fantasy contests, and more could in 2016. Some lawmakers in states like Illinois and New York are considering pushing to protect or legalize the contests, but that has not yet happened. Some tournaments have been struggling under the increased scrutiny, so these companies are looking to finish their lawsuits as quickly as possible so they can continue operating in the new year.