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As Illinois tries to pass a sports betting bill in final days of their legislative session, the main issue has been a penalty or “bad actor” clause for DraftKings and FanDuel.
Legislators contend that the two companies should be punished for defying an opinion by the state’s attorney general in 2015 that daily fantasy sports were illegal.
Despite the AG’s opinion, the companies continued to operate their daily fantasy games contending that their business was not illegal because it was a game of skill and not chance.
Fast forward to 2019 and the Illinois legislators are attempting to create an amendment that will keep FanDuel and DraftKings out of the sports betting market for three years.
Needless to say, the two companies are not pleased with the proposed legislation.
The companies have joined forces and hired attorneys to evaluate the legality of an amendments like the ones proposed by Illinois lawmakers.
The attorneys believe that the two companies will have a strong legal argument to overturn the amendment.
“We believe FanDuel and DraftKings could make a strong claim that this selective targeting of winners and losers is not permitted by the Illinois or U.S. Constitutions,” said the attorneys.
The two companies cannot file legal action just against a proposal, but they can try to win the media war around the issue.
Both companies know that this is an issue that is without compromise because if they agree to a penalty, then other states could follow suit with penalties.
For the two sports betting powerhouses, the villain in this debate is billionaire Neil Bluhm, owner of Rush Street Gambling.
Bluhm owns Rivers Des Plaines casino and FanDuel and DraftKings believe the penalty box clause is being pushed by Bluhm to benefit his new property.
Starting soon, the two companies are launching a $1 million ad buy that will drop advertising across several platforms alerting the public to what they feel is unfair with the legislation.
Over five days DraftKings and FanDuel will air advocacy advertisements aimed at stopping the amendment that would keep them out of Illinois.
Illinois Rep. Mike Zalweski is the main sponsor of the Illinois sports betting bill and acknowledges that the “bad-actor” clause is vital to the ultimate passage of the measure.
“(The clause) remains the No. 1 issue to be decided upon and then I think we can file a final amendment,” Zalewski said.
Rep Zalewski also understands that the pushback by DraftKings and FanDuel is creating pressure that could ultimately kill the bill.
“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.”
For these two companies, if an amendment remains you can bet that they’ll file a lawsuit. It is a scenario that lawmakers will have to understand as they continue to craft the bill.
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