Colin Dew-Becker lost $100 to his buddy, Andrew Wu, in a head-to-head daily fantasy sports contest on FanDuel. Instead of taking his loss, Dew-Becker sued Wu for his $100. Dew-Becker tried to take advantage of an Illinois law designed to curtail illegal gambling. To use this recovery law, Dew-Becker had to prove that FanDuel was an illegal gambling site.
It was a hard sell, and it was unsuccessful. Dew-Becker lost his original case, his appeal to the appellate court, and his appeal to the Illinois Supreme Court. Incredibly, the Illinois Supreme Court’s majority and single dissenting judge both came out against Dew-Becker. So, in creating ground-breaking legal precedents, Dew-Becker got kicked around the room by three different courts and the dissent.
Here are all the different ways Illinois’ courts proved FanDuel daily fantasy sports were legal.
The District And Appellate Courts
The appellate court upheld the district court’s ruling and agreed with the district court’s legal reasoning. So, we’ll summarize their views together. The lower courts decided Dew-Becker couldn’t reclaim his $100 loss for five reasons:
- There must have been a direct connection between the bettors to make recovery possible.
- The law Dew-Becker sued under couldn’t be applied consistently because screen names obscured bettor identities.
- Prosecuting this case under the law would lead to a spike in similar cases.
- The recovery law (from the late 1800s) is less applicable, so using this law to prosecute this case was questionable.
The district and appellate courts shared the same reasons to deny Dew-Becker his winnings. When the Illinois Supreme Court agreed to hear the case, it may have been difficult to imagine what another court could add.
It turns out, the Illinois Supreme Court had a lot to say.
The Illinois Supreme Court Eviscerated The Lower Courts
The Illinois Supreme Court agreed that Dew-Becker couldn’t get his $100 back from his buddy or FanDuel. However, the Illinois Supreme Court disagreed with every part of the lower courts’ legal reasoning. The majority opinion began by dismantling the four reasons the lower courts gave for ruling against Dew-Becker. Then it added a new interpretation that raises serious legal questions.
Direct Connection Between Bettors
The lower courts believed that the bettors had to gamble directly with each other. Since the bettors gambled through an intermediary, they couldn’t sue under the Illinois law for recovering illegal gambling losses.
The Illinois Supreme Court disagreed. The majority argued the legislature intended to use this law to curtail illegal gambling. If illegal gambling businesses had to repay gamblers, they’d go out of business. But using a middleman or an app to get around the law would make the law unenforceable. So, the Illinois Supreme Court rejected that reason for ruling against Dew-Becker.
The lower courts reasoned that screen names made enforcing the recovery law impossible. They conceded some users would know each other’s names and make loss recovery possible. But strangers’ screen names render the recovery law useless. Those unknown aliases wouldn’t be able to be sued for losses because their identities would be unknown.
Readers probably don’t need the Illinois Supreme Court to find that argument ridiculous. The court’s discovery process can uncover the real identities behind the screen names easily. That was a swing and a miss by the lower courts.
The lower courts worried that enforcing this law, in this case, would lead to many other lawsuits. Perhaps so many that the court system would be overwhelmed! (My speculation, not theirs.)
However, the Illinois Supreme Court pointed out that an increase in lawsuits would mean the law was working. If the legislature passed a law criminalizing an unregulated activity, the courts should expect to hear more of those cases. Chief Justice Anne Burke put it bluntly:
“Any increase in litigation is therefore not an absurd result but, rather, the explicit purpose of the statute.”
(Chief Justice Burke also notes that the appellate court contradicted itself. The appellate court reasoned that screen names would decrease cases but prosecuting this case under the recovery law would increase cases. The appellate court can’t have it both ways, but it sure tried.)
Since Illinois has embraced gaming in a way that was unheard of in the late 1800s, the lower courts figured this law was almost inappropriate to apply to this case.
Once again, the Illinois Supreme Court disagreed. Chief Justice Burke reminded the lower court that unless the law violated the state constitution, the courts couldn’t decide the law didn’t count. That would be a job for the legislature. The judicial system’s job is to enforce the laws the legislature passes, not to judge which laws count.
How The Illinois Supreme Court Ruled Against Dew-Becker
Once the Illinois Supreme Court finished breaking the lower courts’ reasoning apart, it offered reasons of its own. It offered two main reasons to rule against Dew-Becker. One reason was arguing that a daily fantasy sports contest is a game of skill instead of a game of chance. The other was a clear rejection of the 2015 Attorney General opinion Dew-Becker’s case rested on.
The Predominant Factor Test
This is the part of the case that made headlines and brought this case to the attention of sports journalists nationwide. The Illinois Supreme Court used the predominant factor test to determine that daily fantasy sports were games of skill, not games of chance.
There are three ways for courts to determine whether a gaming activity is a game of chance or skill:
- Predominant Factor Test
- Material Element Test
- Any Chance Test
These are different legal standards that help states determine which types of gambling they’ll allow. The predominant factor test is the most permissive interpretation, followed by the material element test. The any chance test is the most restrictive. If a game’s outcome is left to any chance, it’s not allowed. (It’s also the standard Texas uses. That’ll be important later.)
The majority opinion states that the predominant factor test had been used on redemption machines. So, the Court had to figure out whether skill was the predominant factor in daily fantasy sports. In other words, could a bettor’s skill override chance? The Illinois Supreme Court decided that yes it could. It cited a long list of studies proving that skill is the predominant factor in fantasy sports games like the one Dew-Becker and Wu went head to head in. Since the game was skill-based, it wasn’t considered gambling. So, recovering illegal gambling losses was impossible.
The Attorney General’s Opinion
When he filed his case in 2016, Dew-Becker used a 2015 Attorney General opinion to back himself up. Attorney General Lisa Madigan wrote an opinion at the end of 2015 that daily fantasy sports constituted illegal gambling under Section 28-8 (a). That was the same law Dew-Becker tried to sue under a few months later.
Attorney General Madigan argued that PASPA, the law that outlawed sports betting, also outlawed daily fantasy sports. Another law, the Unlawful Internet Gambling Enforcement Act, prohibited gambling companies from accepting illegal wagers online. Between those two laws, Attorney General Madigan made a compelling case for outlawing daily fantasy sports sites.
However, the district and appellate courts’ legal reasoning kept them from having to take the Attorney General’s opinion into account. But the Illinois Supreme Court challenged it directly. First, PASPA was overturned in 2018, two years before the Illinois Supreme Court opinion was released. That alone would’ve legalized daily fantasy sports under Attorney General Madigan’s view.
But second, the Illinois Supreme Court rejected Attorney General Madigan’s standard for testing games of skill and chance. Attorney General Madigan used the any chance test. Since the Illinois Supreme Court found no precedent for applying that standard, the Illinois Supreme Court rejected that reasoning. Attorney General Madigan used the same standard as Texas, which isn’t a predominant skill jurisdiction. The comparison was a false one, so Dew-Becker’s legal authority was disarmed.
The Dissent: Taking The Illinois Supreme Court To Task
Five of the seven justices concurred with the written opinion and judgment. One took no part in the decision.
Justice Karmeier was the single dissenting judge. He agreed with the rebuttals to the appellate court’s reasoning. He also agreed with applying the predominant factor test to daily fantasy sports. However, he reached the opposite conclusion as the majority. He argued the predominant factor test showed that daily fantasy sports was a game of chance instead. He also chastised the Court’s decision to use statistical studies that hadn’t been brought by the prosecution or the defense.
That may seem like it commits him to rule in favor of Dew-Becker. But Justice Karmeier found a way to rule against Dew-Becker by approaching the case from a completely different angle. The dissent doesn’t overrule the majority opinion. But it raises important issues about Illinois gaming law and judicial procedure.
Introducing Scientific Studies
If the plaintiff or defendant’s case depends on scientific studies, lawyers can call expert witnesses during the trial. Professional statisticians can put statistical nonsense into context. (Most people need help interpreting r values and catching p-hacking.) But when the State Supreme Court introduces studies, no one can cross-examine or consult experts before rendering a decision.
Justice Karmeier also criticizes the majority for relying on studies to decide whether daily fantasy sports are skill-based at all. He points to other jurisdictions that use the predominant factor test and notes that they use a “qualitative approach.” That means other courts that use the predominant factor test interpret the test like this:
“…to be a contest of skill, the participant’s efforts or skill must control the final result, not just one part of the larger scheme.”
That’s different from the majority’s use. The majority decided that if most of the game was skill, regardless of what determined the outcome, that it was a game of skill. Justice Karmeier disagrees by pointing to other jurisdictions that interpret the predominant factor test by focusing on the outcome–not the whole game. He goes on to give the example of a footrace as a game of skill, where the outcome is entirely skill-based.
However, daily fantasy sports depend on each athlete’s performance on a given week. Bettors have no control over the athlete’s performance. So despite a bettor’s player and statistical knowledge, the outcome is left to chance. According to Justice Karmeier, that makes daily fantasy sports a game of chance.
How Justice Karmeier Rules Against Dew-Becker Anyway
Deciding that daily fantasy sports was a game of chance could’ve put one justice on Dew-Becker’s side. Instead, Justice Karmeier came down on Andrew Wu’s side at the last minute. In one paragraph, Justice Karmeier attacked the case from a completely different angle.
In 2019, Illinois legalized sports betting by passing the Sports Wagering Act. Although the law doesn’t mention daily fantasy sports by name, the definition of sports wagering sure sounds like it covers daily fantasy sports:
“Accepting wagers on sports events or portions of sports events, or on the individual performance statistics of athletes in a sports event or combination of sports events, by any system or method of wagering, including, but not limited to, in person or over the Internet through websites and on mobile devices.”
According to Justice Karmeier, daily fantasy sports contests like the one offered on FanDuel are encompassed in this law. Since there’s a law that governs wagers that match the ones daily fantasy sports players make, those contests are legal now. Since they’re legal, losses can’t be recovered under the recovery law. So, Dew-Becker’s case hit another dead end. But Justice Karmeier summarizes it better:
“While the [Sports Wagering] Act has no bearing on this case, the ability to recover losses from DFS contests, when played in accordance with the Act, has now come to an end.”
Summarizing All The Legal Logic
Dew-Becker didn’t get his $100 back. However, his case secured Illinois as a predominant factor jurisdiction. That will allow it to be more flexible in the type of gaming it allows–unlike states like Texas. Illinois’ interpretation of the predominant factor test also makes it a little more permissible than other predominant factor jurisdictions. However, Dew-Becker v. Wu also uncovered three different ways for Illinois to rule that FanDuel’s daily fantasy sports contests were legal:
|District and Appellate Courts||No direct connection between bettors |
Consequences for prosecuting under recovery law
|Illinois Supreme Court||Daily fantasy sports are games of skill under quantitative analysis of contest|
|Justice Karmeirer's Dissent||The Sports Wagering Act encompasses daily fantasy sports, so it’s impossible for these wagers to be illegal|
Failing to prove his daily fantasy sports contest was illegal, Dew-Becker lost his case. But he can hold his head high knowing his case resolved conflicting interpretations of Illinois gaming law. It definitively resolved the concerns Attorney General Madigan’s expressed in her 2015 opinion and will resolve contentious gaming questions in the future, too. It took four years, but now that it’s resolved, Dew-Becker can try his hand at daily fantasy sports again. He has plenty of room to improve on a loss of 221.1 to 96.3.