A split Illinois Supreme Court has ruled that losers in fantasy sports contests can't retrieve their money from the winner under the state's anti-gambling law, because fantasy sports are not gambling.
Fantasy sports games involve more skill than luck, the court held April 16.
However, dissenting Justice Lloyd Karmeier disagreed, saying he believed fantasy sports is gambling, because they consist of "mere guesses innate with chance."
The decision was penned by Chief Justice Anne M. Burke, with concurrence from Justices Rita B. Garman, Thomas L. Kilbride, Mary Jane Theis and P. Scott Neville Jr.
Justice Michael Burke did not take part.
The ruling favored Andrew Wu in a lawsuit against him by Colin Dew-Becker, filed in 2016 in Cook County Circuit Court.
Dew-Becker played against Wu in a daily fantasy sports (DFS) match, according to court papers. In fantasy sports, participants choose professional or college athletes to create virtual teams. Participants then earn points based on how well the athletes perform in games, defeating other fantasy players by acquiring the most points.
Dew-Becker and Wu each put $109 to compete on the FanDuel DFS platform, court papers said. Dew-Becker lost, with $18 going to FanDuel. Wu kept $100 of his own money and took $100 of Dew-Becker's. Dew-Becker demanded Wu return his $100, citing a section of the Illinois Criminal Code that allows the loser of certain illegal bets recover bets from the winner. Courts have held the section is meant to encourage lawsuits as a way of deterring illegal gambling.
However, at the circuit and appellate court levels, judges concluded the code does not apply when the two people involved in the wager are not directly connected. In the case of Dew-Becker and Wu, FanDuel came between them, the judges said.
Dew-Becker took the matter to the state's high court, but again rolled snake eyes.
Chief Justice Burke did not agree with the views of the lower courts that a middleman, such as FanDuel, eliminates a plaintiff's right to recover lost money.
"If a gambling winner’s liability could be avoided by simply having an agent assist with the gambling transaction in some way, the enforcement mechanism of the statute would
essentially be negated," Burke wrote.
However, Burke found the anti-gambling law invoked by Dew-Becker does not apply on other grounds. A daily fantasy sports contest is not gambling, she said.
"The fact that DFS contests are predominately skill-based is not only widely recognized to be true but has created a potential revenue problem for the DFS websites," Burke wrote. "Because skilled players can predominate the DFS contests, new and unskilled players are often hesitant to participate."
Burke said several recent studies have shown fantasy competitions are predominantly determined not by luck, but by participants' knowledge of statistics and the ins-and-outs of particular sports.
In his dissent, Karmeier submitted that chance was the major component.
"Once a lineup is set and the athletic games commence, the DFS participant cannot influence the athlete’s performance or how points are accumulated," Karmeier observed. "At this point in the game, the outcome of the contest relies entirely on a contingent event that the participant lacks all control over, and there is no subsequent opportunity for the participant to overcome the chance involved."
In Karmeier's view, ability can help a participant, but it will not seal a victory.
"The knowledge of past records, statistics, contest rules, and other information can increase a participant’s chances of correctly predicting the result of the event, but it cannot control the outcome, as no amount of research or judgment can assure a certain result will occur," Karmeier wrote. "No one knows what may happen once the event commences."
Karmeier added fantasy sports is an activity "tactfully camouflaged as a game of skill."
Dew-Becker has been represented by Chicago lawyer Berton N. Ring, of the Law Offices of Berton N. Ring.
Bill Gantz of Duane Morris LLP, argued for Wu. Duane Morris is headquartered in Philadelphia;.Gantz is from the firm's Chicago office.