Illinois Pushes for Fantasy Sports Regulation with New Bill
Illinois lawmakers are taking steps to bring daily fantasy sports (DFS) operators under official regulation with the introduction of the Fantasy Sports Consumer Protection Act. The bill, sponsored by Senator Lakeisha Collins, aims to create clear rules and oversight for DFS companies, which currently operate in a legal gray area within the state.
Key Features of the Proposed Law
The bill lays out a structured framework to license, tax, and monitor DFS operators while ensuring consumer protection.
If passed, the law would grant the Illinois Gaming Board (IGB) the authority to license and regulate DFS operators. The board would oversee compliance, financial reporting, and consumer safety, ensuring that companies follow established industry standards.
Licensing Fees and Tax Structure
The bill introduces tiered licensing fees for DFS platforms based on their size and revenue:
- Existing operators (those active before the law’s enactment) must pay a licensing fee equal to 8% of the previous year’s revenue, with a cap at $1 million.
- New operators face a $10,000 licensing fee, but if they have 10,000+ active Illinois users, they would be required to pay an additional $990,000.
- Operators will also be subject to a revenue tax between 10% and 15%, with the Illinois Gaming Board determining the exact rate.
Defining Fantasy Sports
To avoid misclassification under gambling laws, the bill establishes a clear definition of fantasy sports contests:
- DFS competitions must be skill-based, requiring participants to pay an entry fee to build teams based on real-world sports or eSports events.
- Players compete against each other or against an operator, with results determined by real-world performance rather than pure chance.
Protecting DFS Players
A major focus of the bill is consumer protection. To ensure a safe and fair playing environment, DFS operators must:
- Implement age verification to prevent underage gambling.
- Offer self-exclusion programs for players struggling with gambling issues.
- Enforce anti-fraud measures and anti-money laundering protocols.
- Conduct independent audits to verify fair play and compliance.
The legislation explicitly excludes fantasy sports from the legal definition of gambling. Additionally, DFS venues and platforms will not be classified as gambling establishments under state law.
Changes to Illinois’ Sports Betting and Criminal Codes
The bill also modifies existing laws to ensure DFS has its own distinct legal category:
- It separates DFS from the Sports Wagering Act, meaning DFS operators would not be subject to sports betting regulations.
- It updates the Illinois Criminal Code, ensuring that playing DFS under this law would not be considered illegal gambling.
If passed, the Illinois Gaming Board would be empowered to implement emergency regulations, allowing for a swift rollout of new DFS licensing and oversight measures.
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