A centuries-old statute providing an avenue for a losing bettor to recover their losses does not apply to daily fantasy sports, the Illinois Supreme Court ruled last week.
The ruling was issued in relation to a case brought by an Illinois resident who lost $109 in a fantasy NBA competition hosted by FanDuel back in April 2016.
Colin Dew-Becker and Andrew Wu, both Illinois residents, each paid $109 – a $100 bet and a $9 fee to FanDuel – to compete in an NBA contest. Wu’s team won and he collected the wagered money.
Three days later after the contest took place, Dew-Becker filed a lawsuit seeking to recover his bet under the Loss Recovery Act passed by Illinois lawmakers all the way back in 1819, or just a year after Illinois was declared a state.
The Loss Recovery Act states that a losing bettor of an illegal wager can recover the funds they have lost. Dew-Becker argued that daily fantasy sports are an illegal gambling activity and that he should thus be returned his wager.
The Illinois Supreme Court took up the case to determine whether daily fantasy sports constituted illegal online gambling. The court issued its ruling on April 16, 2020.
DFS Contests Are Dominated by Skill
The Illinois Supreme Court ruled that fantasy sports are a game whose outcome is dominated by skill and not by chance, and therefore FanDuel and other websites hosting such contests do not qualify as illegal gambling venues, nor do bets placed on fantasy sports contests qualify as online gambling.
Chief Justice Anne Burke wrote the majority opinion, which said that “because the outcomes of head-to-head DFS contests are predominantly skill-based, we conclude that (Dew-Becker) was not engaged in ‘gambling’ with (Wu) as required.”
The opinion went on
“We determine here only that the DFS contest at issue in this case does not fall under the current legal definition of gambling.”
Justice Lloyd A. Karmeier was the only justice of all six to dissent. He wrote in his dissent that “throughout the history of anti-gambling laws, courts have recognized the effort and ingenuity man has exerted to circumvent the law by disguising activities as legal or contests of skill although the intended appeal is to chance.”
Justice Karmeier also noted that head-to-head DFS contests “duped the majority into believing it is a game of skill when truly it is a game of chance” as “once a lineup (of athletes) is set and the athletic games commence, the DFS participant cannot influence the athlete’s performance or how points are accumulated.”
While the Supreme Court upheld the legality of betting on DFS contests hosted by operators such as FanDuel, the majority justices said that Illinois lawmakers are able to amend current regulations to manage DFS contests.