* This is a long look, but the payoff is worth it. From Legal Sports Report…

Illinois is considering a three-year penalty box for daily fantasy sports companies that operated in the state previously. This is despite the fact that they operated during a gray period of legality and that sports wagering is different from DFS.

* Background…

Allies of casino operator Neil Bluhm and others that already have a brick-and-mortar presence in the state are battling with internet operators DraftKings and FanDuel, which are in the market with a form of betting on fantasy sports despite a 2015 advisory opinion from then-Illinois Attorney General Lisa Madigan that the practice was illegal under current Illinois law.

Bluhm is pushing an amendment to disqualify DraftKings and FanDuel from being licensed under the sports betting bill. “They are free to team up with other entities that did not violate the law,” like Bluhm’s Rivers Casino, says Bluhm attorney Paul Gaynor, a former top official with Madigan’s office.

The internet gamers respond that Bluhm is just trying to parley the clout he’s built with millions of dollars in campaign contributions into anti-competitive legislation.

* The penalty box language…

(N)o online sports wagering license or sports wagering skin license shall be granted for a period of 3 years after the effective date of this Act: to an applicant if the applicant, any affiliate of the applicant, or any officer or director of the applicant or its affiliate engaged in conduct constituting illegal gambling under any law of the United States, the State of Illinois, or another state as determined by a final decision of a court of competent jurisdiction or as described in an official opinion or pronouncement of the Attorney General of this State or any other state and continued to engage in such conduct after that opinion or pronouncement was issued

* But…

In response to that [attorney general] opinion, the fantasy sites filed suit, asking the courts to declare they were not illegal gambling operations. After years of litigation, the state and fantasy sports sites settled the matter without a ruling, allowing the sites the right to again sue the state should any authority use the Attorney General’s opinion to seek to prosecute them for illegal gambling.

In their report, the Jenner & Block attorneys noted no such prosecution has ever taken place in Illinois. Further, during the litigation, they noted Madigan’s office itself asserted the opinion was non-binding and “entirely without legal effect,” and thus “not reviewable” by a judge.

Yet now, the Jenner attorneys said, supporters of the “bad actors” amendment are attempting to use the 2015 non-binding Attorney General’s opinion to give the opinion the force of law, aimed squarely at two primary targets.'’

“In essence, (the amendment) would give legal effect to the Attorney General’s disputed advisory opinion after the fact and without judicial review, all to the benefit of and at the behest of particular in-state casinos,” the Jenner lawyers wrote.

* And now there’s a new twist…

In 2001, then-Attorney General Jim Ryan issued an advisory opinion in which he declared he believed a practice known as “advance deposit wagering” (ADW), which allows would-be bettors to place horse racing wagers online, was illegal under Illinois state law.

Lisa Madigan replaced Ryan as attorney general, but in 2008 said the opinion should stand.

The law was ultimately changed in 2009, specifically allowing ADW betting in Illinois through companies licensed by the Illinois Racing Board, and who operate in partnership with an Illinois horse racing track.

However, in the intervening years between the Ryan ADW opinion and the change in state law, a number of interests continued to offer ADW services to Illinois residents.

Notably among these was online wagering site YouBet.com. In January 2008, for instance, YouBet announced it agreed with four Illinois horse tracks – Hawthorne, Fairmount Park, Maywood and Balmoral – to create an ADW platform for Illinois residents. The announcement came despite the attorney generals’ opinion. […]

Others operating ADW services in Illinois before 2009 included a company known as America TAB. In 2007, America TAB was acquired by Churchill Downs. The company continued to use the platform to collect wagers from Illinois residents after the acquisition.

Three years later, Churchill Downs also bought YouBet.

Earlier this year, Churchill Downs secured a controlling interest in Rivers Casino.

Neil Bluhm is Rivers Casino’s chairman.

Oops?