Fantasy sports sites support Illinois regulation plan

File: DraftKings offices (Stephan Savoia, File)

Fantasy sports sites are in favor of an Illinois House plan to regulate contested online sports betting.

Boston-based DraftKings and New York-based FanDuel are expected to announce their support of a proposal sponsored by Democratic Rep. Mike Zalewski at the Capitol on Thursday.

Illinois Attorney General Lisa Madigan issued an opinion in December saying the sites were illegal. The companies argued the opinion could destroy a "legitimate industry" allowed by state law.

New York and Texas have also issued opinions challenging the legality of the industry.

The Virginia General Assembly has passed legislation regulating the sites. Virginia is the first state in the country to establish a legal framework for fantasy sports. Democratic Gov. Terry McAuliffe can sign or veto the plan.

The sites have been banned in six states.

Zalewski said he believes playing daily fantasy sports is not gambling under Illinois law. But to ensure a level playing field, his legislation would bar employees of fantasy sports companies, like DraftKings and FanDuel, from competing in any contest offered by any fantasy operators. It would also prevent the sharing of non-public information that could affect the outcome of fantasy games.

The bill would also require fantasy sports companies to verify that players are at least 18 years old and would help prevent fantasy participants from overplaying.

And to help ensure the financial integrity of the fantasy sports companies, the bill would require them to segregate player funds from operational funds and maintain cash reserves or other backup funds in excess of current liabilities.

The Associated Press contributed to this report.
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