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Heidi Specter March 29, 2019 3 min read
Illinois May Get a “Bad Actor” Clause in Sports Betting Bill
Illinois may try and keep FanDuel and DraftKings outside its sports betting market. Why are the two most advanced sportsbook unwelcome in the Land of Lincoln?
Illinois Has Its Bad Actor Clause – FanDuel and DraftKings Suffer
The State of Illinois is still only discussing the legalization of sports betting with one wrinkle – operators that have been offering products without proper licenses may now be banned as “bad actors”.
At least this is what an amendment submitted to the Subcommittee on Sales, Amusement and Other Taxes wanted to introduce. The Subcommittee had to examine the opportunities ahead of Illinois as a potential state where spots betting can be introduced.
With H 3308 down and out, new pieces of legislation have been proposed. The amendment, though, may be counter-productive as it outlines a grim future for any bad actor:
“No sports wagering operator license or Internet sports wagering vendor license shall be granted to an applicant that has accepted, that has or had an affiliate that has accepted, or that has officers or directors who are or have been officers or directors of another party that accepted wagers through the Internet in contravention of any United States law, Illinois law, or any substantially similar laws of any other jurisdiction before the application date”
The meeting was attended by industry leaders. One of those was Rivers Casino Paul Gaynor who salted a familiar sore, reminding about DraftKings and FanDuel’s forays into Daily Fantasy Sports (DFS) back in 2015.
Mike Zalewski, the author of H 3308 expressed his annoyance with the latest development targeting two of the most accomplished sportsbooks on the market.
FanDuel and DraftKings – Guilty of Being Pioneers
The amendment does strike as frivolous, but if approved and attached to any working sports betting legislation, it will also be damning for sportsbooks that have offered betting products without proper licensing.
Among the industry leaders to speak in favor of the sportsbook was Dan Spillane from NBA. Mr. Spillane pointed out that FanDuel, which is affiliated with the NBA as an official gaming operator, is extremely popular in the United States and licensed in other places where sports betting is already legal.
The new amendment is also quite steep when it comes to the licensing fee. Illinois, if the amendment is promulgated, will demand $10 million per license which will then be available for a period of 10 years.
Illinois certainly has a huge population and unlike online gambling, sports betting excites quite a bit of interest. Still, a licensing fee of $10 million can prove too costly and dissuade smaller businesses to apply at first.
This shouldn’t be the desired effect. In any event, the main bone that legislators and proponents of sports betting have with the amendment is ostracizing FanDuel and DraftKings.