Penalty box for DraftKings, FanDuel at issue
Legal Sports Report

Why The Illinois Sports Betting Bill Is Down To Its Final Chance This Year

Illinois sports betting

Months of whittling down multiple options for Illinois sports betting culminate this week with Rep. Mike Zalewski planning to unveil one last-ditch amendment.

The House will try to push it forward in the final days of the legislative session.

Zalewski, who chairs the Revenue and Finance Committee, said the amendment will include the lottery, mandate the use of official league data for in-play wagers, and lower the fees and taxes from the last two amendments.

He also said a so-called “penalty box” for DraftKings Sportsbook and FanDuel Sportsbook is the only issue still being worked out with stakeholders.

“That remains the No. 1 issue to be decided upon and then I think we can file a final amendment,” Zalewski said.

Not the Keanu kind of bad actor …

Paul Gaynor, representing Rivers Casino, has been particularly outspoken in hearings supporting a bad-actor clause to lock out DraftKings Sportsbook and FanDuel Sportsbook for up to three years.

The issue in question involves DraftKings and FanDuel offering daily fantasy sports in the state after a nonbinding 2015 opinion by the state attorney general suggested DFS violated state law.

Gaynor said DraftKings and FanDuel have captured more than 80 percent of the sports wagering market in NJ sports betting. He warned that Illinois stakeholders are not going to pay $10+ million for licenses to share less than 20 percent of the market.

Lawyers representing FanDuel responded that there would be a swift constitutional legal challenge for any attempt at a regulatory delay.

“This issue consumes all the oxygen related to sports betting right now,” Zalewski said. “We know we need to make a decision on whether to include a penalty box or not. We still haven’t reached a consensus way to move forward on this.”

Zalewski hears critics, adjusts

Zalewski laughed when asked if he received feedback from stakeholders on the two amendment options he proposed for H 1260. He got a lot of input about the proposals, which included unprecedented taxes and fees.

He listened to those concerns and adjusted the fees and taxes downward. Yet don’t expect the initial license fee to go under the $10 million needed to meet Gov. J.B. Pritzker’s budget proposal.

This is why the Tennesee bill is bad …

Zalewski said Tennessee becoming the first state to pass a sports betting bill requiring the use of official league data for in-play wagers played a part in Illinois accepting that league demand.

“Tennessee going on official league data is indicative to us that we might not be the first state,” Zalewski said. “We could maybe survive that challenge.”

Lottery retailers would get IL sports betting

One of the previous amendments allowed the lottery to offer parlay wagering at 2,500 retail locations, while the other excluded lottery.

At the last hearing, Tom Swoik of the Illinois Casino Gaming Association lamented paying $10 million for a license when legal sports betting was available at so many locations.

“We think there’s room for a lottery pilot program,” Zalewski said. “It’s a state asset so we think it’s important to see what they can do with sports betting.”

Zalewski indicated that the lottery’s participation hasn’t been a concern for the other stakeholders. The focus has been on the details of that participation, meaning there could be a compromise on the number of lottery retailers offering sports betting.

“We’ve heard feedback on the type of wagers lottery concessionaires could take, the number of locations, where the money would go,” Zalewski said. “I think we solved those items.”

Time is running out to pass Illinois sports betting

The legislative session comes to an end in Illinois at the conclusion of this month.

With the House bill yet to have advanced through a committee and nary a peep heard on sports betting from the Senate side, it seems highly unlikely that a sports betting bill can go the distance in the next 10 days.

However, Zalewski believes there is still hope this session. He plans to advance H 1260 through committee to the floor soon after the amendment is introduced.

Hope that the House and Senate could move quickly to pass the bill goes back to the Pritzker’s request for sports betting revenue in the budget, and the Democrat-led chambers wanting to come through for their new Democratic governor.

“We’ve been working with the Senate,” Zalewski said. “They know where we stand. This isn’t happening in a vacuum. I think there’s a desire to do sports betting in the governor’s office and two chambers.”

Matthew Kredell
- Matthew started his career as a sportswriter at the Los Angeles Daily News, where he covered the NFL, Kobe-Shaq three-peat, Pete Carroll’s USC football teams, USC basketball, pro tennis, Kings hockey and fulfilled his childhood dream of sitting in the Dodgers’ dugout. His reporting on efforts to legalize sports betting began in 2010, when Playboy Magazine flew him to Prague to hang out with online sportsbook pioneer Calvin Ayre and show how the NFL was pushing US money overseas by fighting expansion of regulated sports betting across the country. A USC journalism alum, Matt also has written on a variety of topics for Men’s Journal, Los Angeles magazine, LA Weekly and ESPN.com.
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