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Bluhm’s “penalty box” language could apply to… Bluhm?

Tuesday, May 21, 2019

* 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?

- Posted by Rich Miller        

10 Comments
  1. - Hyperb - Tuesday, May 21, 19 @ 10:57 am:

    Looks like he doesn’t want any competition. Shocker


  2. - Donnie Elgin - Tuesday, May 21, 19 @ 11:16 am:

    Bluhm family is very generous..

    Meredith Bluhm donated $5,000.00 to Citizens for Lou Lang on May 13, 2018

    Neil G. Bluhm donated $5,000 to Citizens for Lou Lang on May 13, 2018

    Andrew Bluhm donated $500.00 to Citizens for Lou Lang on May 13, 2018


  3. - wordslinger - Tuesday, May 21, 19 @ 11:19 am:

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

    Wow, I missed that bit of news. Seems like a big deal that Illinois’ biggest casino (Rivers) and racecourse (Arlington) now have the same owner.

    Does that mean Bluhm and Duchossois are in cahoots now, going forward on gambling expansion?

    Duchossois still has a piece of Churchill Downs and is on the board of directors. Griff’s Citadel LLC also has a piece of the action.

    http://ir.churchilldownsincorporated.com/stock-information/ownership-profile


  4. - Mentor - Tuesday, May 21, 19 @ 11:23 am:

    I believe Pritzker was an investor in youbet.


  5. - Rich Miller - Tuesday, May 21, 19 @ 11:25 am:

    ===I believe Pritzker was an investor in youbet. ===

    Yep. And served on the board. Not really relevant to this story, however.


  6. - Al - Tuesday, May 21, 19 @ 11:28 am:

    It is a shame the top gaming rate does not kick in until $200 million. The $500 million a year gorilla of illinois casinos is the primary beneficiary of the obtuse regulation which cheats our schools and leaves us paying property tax bill. The River casino pulls in a major haul and has too much influence. We need public policies which end property tax payments as a means to subsidize casino license holders.


  7. - Roland the Headless Thompson Gunner - Tuesday, May 21, 19 @ 1:42 pm:

    Bluhm is pushing hard to eliminate competition via the bill. It will be interesting to see what Kwame does.


  8. - nice things - Tuesday, May 21, 19 @ 2:15 pm:

    If we are going to have sports betting the state should get every single penny it can for it. Why would legislators block the companies that can bring in the most money?


  9. - City Zen - Tuesday, May 21, 19 @ 2:42 pm:

    ==It will be interesting to see what Kwame does==

    Since Duchossois wagered $25,000 on Harold and DraftKings and FanDuel bet $50,000 on Kwame, the only question is will we be allowed to smoke while we bet on the Bears game from our couch. All cigs point to yes.


  10. - Chicagonk - Tuesday, May 21, 19 @ 3:42 pm:

    There are donors who donate because they like you and there are donors who donate because they need you. Be careful relying on the second type of donor.


Sorry, comments for this post are now closed.


* Reader comments closed for the weekend
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