The debate over how Illinois should regulate Daily Fantasy Sports (DFS) took center stage at a recent Senate Gaming, Wagering and Racing Committee meeting—and it’s shaping up to be one of the most consequential regulatory flashpoints in the country for the growing fantasy sports sector.
At issue? Whether Illinois should legalize DFS in a way that levels the playing field for all fantasy operators—or whether the rules will favor major sportsbook players looking to dominate yet another vertical.
Two Bills, One Big Decision
Lawmakers examined two competing proposals:
- Sen. Lakesia Collins’ SB 1224: Legalizes both peer-to-peer (P2P) and “against-the-house” DFS contests, with a proposed tax rate between 10–15%.
- Sen. Bill Cunningham’s SB 2145: Only permits P2P contests and implements a graduated tax scale similar to the state’s recent sports betting tax hikes, capping out at 40%.
Supporters of SB 1224 argue it offers consumer choice and reflects how players actually engage with DFS today. The inclusion of against-the-house contests—where players compete against preset lines, not each other—has been a flashpoint for controversy. While some regulators consider it too close to traditional sports betting, fantasy operators insist it’s a distinct experience.
Mimosa or OJ? Operators Push Back on Comparisons
PrizePicks, one of the largest DFS operators, made its position crystal clear: DFS is not sports betting. Shane Saum, a company rep, stated during the hearing, “You can put a glass of orange juice next to a mimosa, and they may look alike, but they are definitely not the same.”
He emphasized that PrizePicks doesn’t offer moneylines, parlays, or props—the hallmark of traditional sportsbooks. Instead, DFS is a game of player projections and choices, not betting on outcomes or odds set by bookmakers.
PrizePicks and others believe operator-specific responsible gaming tools aren’t enough to create a competitive, regulated market—especially if legislation only allows one format of fantasy contests.
The Licensing Fee That Could Kill the Market
Another point of contention? The proposed $500,000 licensing fee in SB 2145, which small and medium-sized DFS providers argue would drive them out of the market entirely.
Tim Jensen, COO of Real Time Fantasy Sports, warned that this fee—combined with high tax rates—could “effectively lock us out.” He pointed to tiered fee systems in Pennsylvania and New Jersey that allow small operators to thrive while giving consumers more choice.
Similarly, NetChoice’s Bartlett Cleland warned that SB 2145 could “lock in market control by the largest sports betting operators,” creating a de facto monopoly in yet another vertical.
Is DFS Becoming a Regulatory Trojan Horse?
Joe Miller of the Illinois Gaming Board (IGB), which helped shape SB 2145, argued that a broader DFS bill like SB 1224 could create loopholes. He expressed concerns that sportsbooks might attempt to label their products as DFS to avoid the heavier taxes now imposed on sports betting.
Miller also said SB 1224 could reduce the IGB’s authority by forcing regulators to bend to the whims of the fantasy industry rather than enforcing clear-cut rules.
Yet critics argue that the regulatory structure shouldn’t sacrifice innovation and fairness in the name of control. Collins and her supporters claim her bill is more aligned with how most other states handle DFS—with fair taxation and broader contest formats.
The Stakes Are High for the Future of DFS
Operators like Underdog and Real Time Fantasy Sports warned that poor legislative decisions now could erase competition before it begins. Fantasy contests generate far less monthly revenue than sportsbooks—between 1/20th to 1/30th, according to Underdog SVP Stacie Stern—yet they face similar, if not more punitive, regulatory burdens.
The bottom line: if Illinois goes the route of high fees and restrictive licensing, the DFS landscape could quickly become a battleground monopolized by existing sportsbook powerhouses.
Collins wrapped up her remarks with a warning of her own: “Let’s not let innovation be stifled by size. The future of fantasy sports in Illinois should be open to more than just the biggest players.”
