Chris Grove: Illinois will be a slog at best. https://twitter.com/ScottFantasy/status/722825765172023296 

Illinois will be a slog at best. https://http://twitter.com/ScottFantasy/status/722825765172023296 

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Chris Grove: Illinois will be a slog at best. https://twitter.com/ScottFantasy/status/722825765172023296 

Cal Spears: Great to see @mjzalewski’s amended Illinois bill pass through committee 9-4 just now. House Floor vote tomorrow. Keep the momentum!

Great to see @mjzalewski‘s amended Illinois bill pass through committee 9-4 just now. House Floor vote tomorrow. Keep the momentum!

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Cal Spears: Great to see @mjzalewski’s amended Illinois bill pass through committee 9-4 just now. House Floor vote tomorrow. Keep the momentum!

How a large fantasy sports plan touches a small Elmhurst business

Brett Baker remembers when notifications about his fantasy sports teams didn’t pop up on his phone.

He’s been playing in an NFL fantasy league with his college friends since the mid-1990s, when the “commissioner,” the friend who would organize the league, used to fax out the rosters every week.

“I would go buy a USA Today every Monday and go through the box scores,” he recalls. “There were two of us in our league that fought really hard against going online. This is before I had the business.”

Baker’s business is Big Game Software, an Elmhurst-based tech company that develops web applications for both daily and season-long fantasy sports companies. He started it in 2006.

The landscape has changed dramatically since then, and Wednesday, state lawmakers advanced regulations on the growing industry despite concerns from the Illinois Gaming Board, the state entity that would enforce the new rules.

Under the proposal, the big players in daily fantasy sports, including FanDuel and DraftKings, could pay as much as 22.5 percent of the money they make in Illinois in state taxes. It would also set the minimum age of 21 to play the contests.

Baker develops software for some startups in the industry, and he says big fees could make it tough on them. Companies would have to pay a licensing fee between $1,500 and $50,000, based on their revenue.

The regulations are necessary because Illinoisans are already playing these games, said state Rep. Mike Zalewski, a Riverside Democrat who sponsored the legislation.

“We are faced with the choice of deciding whether we want to protect them from a reality that we know exists, and make sure they can enjoy these games in a reasonable way,” he said. “Or simply try to ban them from existence and then they can go play these games, which they will, in an unregulated vacuum that we have no control over.”

State Rep. Ron Sandack, a Downers Grove Republican, argues Illinois should follow what New York did and order DraftKings and FanDuel to cease operations in the state until the legal standing of the games is clarified.

“We’re doing this backward and I don’t think that’s fair or safe,” he said.

Attorney General Lisa Madigan ruled daily fantasy sports contests are illegal in Illinois, agreeing with officials in some other states that the games constitute gambling.

FanDuel and DraftKings sued over the ruling, maintaining their contests in which participants pay to pick a roster of professional athletes and rack up points based on their performance in games with the chance to win cash prizes are games of skills. They both continue to operate in the state.

“(This bill) puts gaming into people’s homes. The question is should gaming be this pervasive. Specifically, we don’t see a way to prevent teenagers or kids even younger from getting their parents account numbers and gaming,” said Caleb Melamed, who works for the Illinois Gaming Board. Developers like Baker say they can do their best, but there’s no way to guarantee minors can’t play.

Baker says the hardest part for him personally is having the season-long fantasy leagues he has played as a hobby getting swept up in daily fantasy contests and regulated as gambling.

“People go to a casino to win money. People who are playing fantasy sports play because they want to be (New England Patriots Head Coach) Bill Belichick,” he said. “And they win and they think they are Bill Belichick. But that’s why they do it.”

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How a large fantasy sports plan touches a small Elmhurst business

Illinois weighs legalization of daily fantasy sports betting

SPRINGFIELD — The Illinois House gave its initial approval to a measure that would legalize betting on daily fantasy sports on Wednesday, but some lawmakers expressed concern about whether the bill has been properly vetted, and its chances at full passage remain uncertain.

The proposal would regulate how the online businesses operate by dictating who can play and by taxing and charging operators licensing fees. Only people 21 and older could play, and employees at the companies would be barred from participating in the contests.

Industry giants DraftKings and FanDuel have been lobbying for regulation around the country that would allow them to continue operating, after some states said that what they were doing amounted to illegal online gambling.

The companies support the legislation in Illinois, a state where they say 2 million people participate in the games. That makes the Illinois the third-largest market for the contests, according to the Fantasy Trade Association, which represents DraftKings, FanDuel and 300 other operators.

A House judiciary panel approved the bill on a 9-4 vote, sending it to the full chamber for consideration, which could happen as soon as this week.

“Without [this legislation], fantasy sports as we know it would not be able to continue in Illinois,” said Peter Schoenke, speaking on behalf the Fantasy Trade Association.

Illinois Attorney General Lisa Madigan said in a December opinion that she believes the games are illegal. Other states have come to the same conclusion, prompting lawmakers nationwide to work on regulating or banning the emerging online businesses. Last month, the governors of Virginia and Indiana signed legislation to regulate the new industry. Kansas has also legalized daily fantasy sports.

In all, 35 states have introduced legislation addressing daily fantasy sports gambling, according to the National Conference of State Legislatures.

“I know this is a controversial bill,” said Rep. Mike Zalewski, a Riverside Democrat sponsoring the Illinois bill. “Constituents of ours play these games and regardless of whether we agree with their decisions to do so, we’re faced with the choice of deciding whether we want to protect them from the reality we know exists and make sure that they enjoy the games in a reasonable way.”

The industry came under scrutiny last year after a DraftKings employee won $350,000 in a fantasy football contest hosted by FanDuel, raising questions about whether staffers were benefiting from insider knowledge of how the games were being played.

In daily fantasy, players pay to draft and manage rosters of teams like a general manager and then earn points depending on how well those players do, winning cash prizes when they do better than other teams. The companies have depicted their contests as games of skill, not chance.

The Illinois Gaming Board would oversee the contests. Operators would face fines if they don’t comply with aspects of the law. Operators would pay applications and licensing fees based on the revenue they generate. Companies with more than $10 million in revenue would pay a $50,000 licensing fee, while those with less than $100,000 in revenue would pay $1,500.

Taxes would also be paid on a sliding scale, with companies that make more than $15 million in profits annually paying the highest rate of 22.5 percent.

Some lawmakers on the committee that approved the bill expressed concerns about whether the legislation did enough to prevent underage gambling and worried that the bill was moving too fast.

Republican Rep. Ron Sandack, of Downers Grove, took issue with how the measure would allow operators to do business even as the state’s gaming board worked to set regulations.

“If I were granted a casino license, I don’t get to open up the shop and start letting gambling occur while the gaming board vets me,” he said. “The vetting occurs first so that the operations are lawful, so that the people doing the gaming are lawful, so that the game isn’t rigged — all that occurs first. Then licenses are given. We’re doing this backwards and I don’t think that’s fair.”

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Illinois weighs legalization of daily fantasy sports betting

Fantasy sports bill moves out of House committee – Lincoln Courier

A House committee voted 9-4 Wednesday to advance a bill formally legalizing online fantasy sports services in Illinois.

However, some members voting in favor of sending the bill to the full House expressed concern that adequate consumer protections be established.

In December, Illinois Attorney General Lisa Madigan determined that daily fantasy sports was illegal under state gambling law. In response, Rep. Mike Zalewski sponsored a bill to include fantasy sports participation as an exception to current law.

“This is an opportunity to create a safe place for these games to occur,” said Zalewski, D-Riverside. “We have an opportunity to pass one of the most comprehensive fantasy sports laws in the country, if not the most comprehensive.”

The Illinois Gaming Board, which would have supervising authority over all fantasy sports contests, opposes the bill due to an inability to regulate these contests when they are conducted within a participant’s home.

“We don’t see a way to prevent teenagers or children from getting their parents’ account numbers and using the Internet to gamble,” said Caleb Melamed, Gaming Board spokesman.

Rep. Ron Sandack, R-Downers Grove, who voted against advancing the bill, suggested revising the regulations so that the Gaming Board is comfortable with them before moving forward.

Cory Fox, spokesman for FanDuel, one of the country’s top fantasy gambling sites, said the company uses a third-party vendor to verify players.

Dave Gerczak, co-founder of the Fantasy Football Players Championship, said that underage player participation has never been an issue on his site.

“In the entire eight-year existence of our business, we’ve never had a child ever try to register and play any of our events, so I know it sounds like it’s good to say that you’re trying to protect the 10-year-old kids going in there, but they’re not doing that, so it’s kind of an artificial issue,” Gerczak said.

House Bill 4323 limits contests to players who are 21 and over and also sets licensing fees, application fees and operator taxes on a sliding scale. The tax revenue would go to help fund education.

Gerczak said he supports the legislation because it is the only bill in the nation to distinguish between large daily fantasy companies like DraftKings and FanDuel and smaller, season-long contests like his.

He argued that smaller businesses that conduct fantasy sports don’t do enough business for the regulations imposed onto DraftKings and FanDuel to be worthwhile.

“The majority of our companies are in the hobbyist, season-long model where they draft, buy and manage a team for four months, spending maybe $100, and a number of different states are coming out and saying they don’t want to regulate them,” Gerczak said.

Page 2 of 2 – “I know we’re encapsulated within the bill, but we really feel like season-long fantasy sports is a totally different animal than daily fantasy sports, and other states are recognizing that.”

— Contact Drew Zimmerman: drew.zimmerman@sj-r.com, 782-3095, http://twitter.com/DZimmerman_sjr.

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Fantasy sports bill moves out of House committee – Lincoln Courier

Casinos Illinois Gaming Board fight fantasy sports measure

despite strong opposition from other gambling stakeholders and the Illinois Gaming Board. In a 9-4 vote following heated testimony and concerns that the bill was being rushed, the House Criminal Law Committee today sent House Bill 4323, known as the …

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Casinos Illinois Gaming Board fight fantasy sports measure

Lawmakers looking to tax regulate fantasy sports in Illinois – Chicago Tribune

SPRINGFIELD — State lawmakers on Wednesday took the first step toward regulating online sports betting, a move that comes as the popular fantasy sports industry finds itself under fire in Illinois following an opinion from Attorney General Lisa Madigan declaring the practice amounts to illegal gambling.

Under legislation advanced by a House committee, fantasy sports would be legalized and taxed, with oversight falling to the Illinois Gaming Board — the same agency that oversees the state’s casinos, horse tracks and video machines at bars and restaurants. But state gaming regulators opposed the measure, saying it would be difficult to properly oversee gambling that takes place at home.

“The question is, should gaming be this pervasive?” said Caleb Melamed, legislative liaison for the gaming board. “We don’t see a way to prevent teenagers or children even younger from getting their parents’ account numbers and using the Internet to play.”

Supporters argued companies would be required to have safeguards aimed at detecting improper use, but said it was ultimately a parent’s responsibility to monitor their children. They contended the legislation struck the right balance between oversight, generating new tax dollars for the state and ensuring these businesses can continue to operate.

“This is an opportunity to create a safe space for these games to occur,” said sponsoring Rep. Mike Zalewski, D-Riverside.

The measure is backed by industry officials, who said they welcomed the chance to remove legal questions but maintained online sports betting is not gambling, but a game of skill that requires careful study of individual players and teams. The daily fantasy sports industry has been under the microscope by attorneys general in many states.

“It’s really hard, if not impossible, to fix a fantasy sports contest. You can’t get one player to throw more touchdowns than the other team, and even if you did it would only be one of your 12 guys and you’re going against lots of opponents and what players they have,” said Peter Schoenke, president of Fantasy Sports Trade Association, which is based in Chicago. “The complexities are crazy, so it’s not a one-to-one compared to gambling, therefore it needs its own regulatory structure.

Still, officials raised concerns that the new regulations could prove too burdensome for some smaller operators, who may cease to do business in Illinois.

The attorney general’s office has not weighed in on the legislation. Madigan has been sued by New York-based FanDuel and Boston-based DraftKings over her legal opinion, which they argue could put them out of business in Illinois.

Under the legislation, operators would be charged fees and taxes on a sliding scale based on how much revenue they generate. Application fees range from a low of $500 for companies making less than $100,000 in revenue a year, to $37,500 for companies that bring in more than $10 million a year. Taxes range from 5 percent on revenues up to $1 million, to 22.5 percent on revenues above $15 million and would be used to prop up education funding.

Zalewski could not provide an immediate estimate on how much money the new rules might bring in.

Operators would undergo background checks and regular audits, and all employees and contractors would be banned from participating in betting. Companies would not be allowed to advertise at schools, college campuses or amateur athletic events.

Play would be limited to those 21 and older, and players would be lumped into separate skill categories based on how many games they’ve played or prizes they’ve won. The idea is to limit the type of games less experienced players can enter.

To control losses, players would be limited to depositing $3,000 into their gaming accounts every three months. That threshold could go higher, however, if a company determines a player has the appropriate financial footing. Prices will be withheld for players who own child support payments.

The measure would expire in January 2020, at which point lawmakers could renew the legislation or change it.

In other action Wednesday, the Senate sent the House a measure to allow undocumented immigrants access to state-based financial aid for college. Sponsoring Rep. Iris Martinez, D-Chicago, said the bill would allow universities to offer scholarships to an estimated 1,500 undocumented students at the state’s four-year public universities who are succeeding academically but struggling to pay tuition.

The bill does not allow those students to receive scholarships under the Monetary Award Program, which colleges and universities have been struggling to cover this year amid the state budget impasse.

cbott@tribpub.com

mcgarcia@tribpub.com

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Lawmakers looking to tax regulate fantasy sports in Illinois – Chicago Tribune