Illinois Eyes Regulation of Fantasy Sports Industry

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October 28, 2015

fantasy-sportsYesterday, Illinois State Representative Mike Zalewski (D-Riverside), introduced the Fantasy Contests Act, a bill that the lawmaker hopes will apply regulatory oversight to the daily fantasy sports industry by requiring operators to adopt and implement certain policies and procedures.  The proposed legislation comes in response to the recent reports of industry insider trading.

What are some of the key components of the proposed regulatory scheme?

The following are highlights of the proposed legislation:

  • Fantasy sports operators must implement internal policies that:
    • Prevent employees from competing in contests offered by any fantasy sports operator;
    • Prevent sharing of non-public information that could affect the outcome of fantasy sports contests with third-parties until that information is shared with the public;
    • Prevent individuals younger than 18 years of age from participating in contests; and
    • Set a maximum number of entries that a single individual can submit in a single fantasy sports contest, and ensure that individuals are prevented from exceeding that number.
  • Fantasy sports operators must segregate operating funds from individual funds and maintain reserves in an amount equal to the amount of deposits in player-accounts; and
  • Fantasy sports operators must have independent third-parties conduct annual audits to ensure compliance with the provisions of the proposed statute, and submit the audit results to the State Attorney General.

The proposed bill would impose a maximum penalty of $1,000 per violation.   Additionally, the proposed bill would amend the State’s penal law to ensure that individual participants cannot be convicted of gambling for competing in fantasy sports contests.

Keep Your Fantasy Sports Venture Legal

As the fantasy sports industry, and the laws and regulations that govern it, continue to grow and evolve, it is essential that fantasy sports operators keep abreast of the developing legal landscape. In addition to Illinois, California and Massachusetts have also indicated their respective willingness to regulate the industry, while Congress has recently announced its intention to conduct fantasy sports-related hearings. Accordingly, operators should regularly review their respective contest platforms, entry fees, prize structures and marketing campaigns with knowledgeable counsel in order to effectively navigate this rapidly changing regulatory framework.

If you are interested in learning more about this topic or pursuing a fantasy sports venture, please e-mail us at, or call us at (212) 246-0900.

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Related Blog Posts:

Uncertain Times for Daily Fantasy Sports

Latest Developments in the Fantasy Sports Industry

Fantasy Sports Contests: Avoiding Civil and Criminal Liability




David O. Klein

David O. Klein

David Klein is one of the most recognized attorneys in the telemarketing, technology, Internet marketing, sweepstakes and telecommunications fields. Skilled at counseling clients on a broad range of technology-related matters, David Klein has substantial experience in negotiating and drafting complex licensing, marketing and Internet agreements.

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