Naperville Business Attorney Discusses Lawsuit Filed by DraftKings Against Attorney General

Attorney General, lawsuit, Naperville business law attorneyIn many small businesses and corporate offices—including a large number of my business clients—this week marks the beginning of a month-long, friendly competition linked to the NCAA men’s college basketball tournament. Diehard fans and casual spectators alike tend to participate in the so-called “March Madness” festivities by filling out a bracket—predicting winners in all of the tournament games—and throwing a few dollars into the office pool. While these types of office pools are technically against gambling laws in most states, millions are expected to take part over the next few weeks.

Even as the basketball tournament gets underway, another sports-related gaming industry is bracing for a legal battle to be played out in an Illinois courtroom this summer. DraftKings, one of two leaders in online fantasy sports games, has filed a lawsuit against Illinois Attorney General Lisa Madigan. The suit comes on the heels of Madigan’s announcement in December that online fantasy sports games violated the state’s gambling laws and that Illinois residents were prohibited from participation.

Luck and Chance or Control and Skill

The lawsuit was filed in December after a letter from the Attorney General closed the door on fantasy sports games to millions of would-be participants in Chicago and throughout Illinois. In January, DraftKings and the Attorney General’s office agreed to an expedited process and a bench trial that is expected to begin in late June. At the heart of the issue is the way in which fantasy sports operate and whether participants are winning money based on chance or on skill. Illinois law permits games that award prizes for skill and performance, characteristics which the gaming companies claim are inherent to winning fantasy sports games.

To play a fantasy game, a participant selects a “team” of real-life professional athletes whose on-the-field (court, track, etc.) performances are carefully tracked and compiled. Based on a number of statistical categories dependent on the sport, the participant’s fantasy team is compared to that of other players, with prizes awarded to top-performing participants. DraftKings maintains that selecting the right team requires skill, knowledge, and control over the process, while the Attorney General claims that the professional athletes are the actual “players” and that fantasy sports participants are essentially betting on luck.

While the lawsuit may provide some clarification, lawmakers in Springfield are also developing legislation that could offer a more direct answer. According to reports, a proposed measure would specifically legalize online fantasy sports, with government oversight and regulations. The outcome of both efforts remains to be seen.

When Your Business Is Threatened

The DraftKings lawsuit, along with a comparable one filed by DraftKings primary competitor FanDuel, was filed in order to protect a company’s interests against what it felt to be an improper application of the law. Regardless of what you may think about fantasy sports or gambling, if you are a business owner, you must be prepared to take similar steps if newly-applied regulations threaten your ability to operate as you see fit.

If you have questions about protecting your business, either from competitors or unfair regulatory guidelines, contact an experienced business law attorney in Naperville. At The Gierach Law Firm, we will help you understand your available options and are ready to provide sound legal advice for keeping your company profitable. Call 630-756-1160 to schedule an appointment today.

 

Sources:

Forbes

CBS News

Chicago Tribune

Crain’s Chicago Business