COLIN DEW-BECKER, Appellant, v. ANDREW WU, Appellee.
(Docket No. 124472)
IN THE SUPREME COURT OF THE STATE OF ILLINOIS
Opinion filed April 16, 2020.
2020 IL 124472
OPINION
¶ 1 In this case, we must determine whether the loser of a head-to-head contest on a daily fantasy sports website may recover money lost to the winner of the contest under
BACKGROUND
¶ 2 ¶ 3 On April 4, 2016, the plaintiff, Colin Dew-Becker, filed a complaint in the circuit court of Cook County against the defendant, Andrew Wu. The complaint alleged that plaintiff and defendant had engaged in a daily fantasy sports (DFS) contest on a website known as FanDuel and that, as a result of this contest, plaintiff had lost $100 to defendant. The complaint further alleged that the DFS contest constituted illegal gambling under Illinois law and, therefore, plaintiff was entitled to recover the lost money under
¶ 4 At a bench trial, plaintiff testified that in a DFS contest each participant creates a virtual roster of players by selecting from among current athletes in a real professional or amateur sports league. Each participant then earns fantasy points based on how well the selected athletes perform individually in their actual professional or college sports games on a given day. After all such games are completed, a total score is calculated for each of the virtual rosters, and the winner of the contest is the participant whose roster has the most points. A head-to-head DFS contest is one that involves only two participants who compete against each other directly.
¶ 5 Plaintiff testified that on April 1, 2016, he and defendant each paid a $109 entrance fee to participate in a head-to-head DFS contest on the FanDuel website. The contest involved National Basketball Association (NBA) games, and both plaintiff and defendant selected a fantasy roster of nine NBA players. Plaintiff stated that he understood when entering the contest that the winner would keep $200, the loser would get nothing, and FanDuel would keep $18. Plaintiff testified that defendant won the DFS contest by a score of 221.1 to 96.3 and that defendant received the $200 due him.
¶ 6 Defendant, appearing pro se, testified that he did not view the DFS contest as “an illegal gambling situation.” He stated that he chose to join the fantasy contest voluntarily and that he paid the entrance fee knowing that, if he did not win, $100 would go to plaintiff.
¶ 7 At the close of trial, the circuit court rendered judgment in favor of defendant. The court concluded defendant was entitled to judgment as a matter of law because
¶ 8 On appeal, the appellate court affirmed. 2018 IL App (1st) 171675. The appellate court agreed with the circuit court‘s reading of
¶ 9 We granted plaintiff‘s petition for leave to appeal.
ANALYSIS
¶ 10 ¶ 11 At issue in this case is whether plaintiff can recover money lost in a head-to-head DFS contest under
“(a) Any person who by gambling shall lose to any other person, any sum of money or thing of value, amounting to the sum of $50 or more and shall pay or deliver the same or any part thereof, may sue for and recover the money or other thing of value, so lost and paid or delivered, in a civil action against the winner thereof, with costs, in the circuit court.”
Id.
¶ 12 Determining the meaning of
¶ 13 The appellate court assumed, arguendo, that a head-to-head DFS contest is “gambling” within the meaning of
¶ 14 Courts are not free to read into a statute exceptions, limitations, or conditions the legislature did not express. Illinois State Treasurer v. Illinois Workers’ Compensation Comm‘n, 2015 IL 117418, ¶ 21. The only “direct” connection required under
¶ 15 The appellate court also concluded that
¶ 16 First, it is not always true that DFS participants do not know one another‘s identities. In this case, for example, plaintiff was clearly aware of defendant‘s true identity. Plaintiff invited defendant to participate in the DFS contest, and plaintiff‘s complaint identified defendant by name, even though defendant had used a screen name during the DFS contest itself. Id. ¶ 20. Further, even if a defendant‘s real name is unknown, Illinois Supreme Court rules permit limited pretrial discovery to uncover that name. See
¶ 17 The appellate court also rejected the application of
¶ 18 The appellate court‘s conclusion that applying
¶ 19 Finally, the appellate court observed that “the trend in Illinois is toward more relaxed gambling laws” and that
¶ 20 It is certainly true that the “era of strong opposition” to gambling in Illinois has passed (Sonnenberg, 810 F.3d at 510) and, with the recent enactment of the Sports Wagering Act (Pub. Act 101-31, § 25-5 (eff. June 28, 2019) (adding
¶ 21 Although we do not find the appellate court‘s reasoning persuasive, we nevertheless agree that the judgment of the appellate court should be affirmed because the DFS contest at issue here was not gambling. In order to recover under
¶ 22 Answering this question can present difficulties because the outcome of every contest depends, at least to some degree, on chance. Even chess, a highly skill-based contest, can be affected by the random factors of who draws white (and thus goes first) or whether one‘s opponent is sick or distracted. To address these difficulties and determine whether a contest is one of skill and, hence, exempt from gambling laws, courts have applied three general tests. See Marc Edelman, Regulating Fantasy Sports: A Practical Guide to State Gambling Laws, and a Proposed Framework for Future State Legislation, 92 Ind. L.J. 653, 663-65 (2017). The first test, and the one adopted by the majority of courts, is typically referred to as the “predominant purpose test” or “predominate factor test”
“[t]he test of the character of the game is, not whether it contains an element of chance or an element of skill, but which is the dominating element that determines the result of the game, or, alternatively, whether or not the element of chance is present in such a manner as to thwart the exercise of skill or judgment.” (Internal quotation marks omitted.) O‘Brien v. Scott, 89 A.2d 280, 283 (N.J. Super. Ct. Ch. Div. 1952).
¶ 23 A second test used to differentiate between contests of skill and gambling is called the “material element test.” Edelman, supra, at 664. Under this test, a contest is considered a game of chance if the outcome depends in a material degree upon an element of chance, even if skill is otherwise dominant. See, e.g., Thole v. Westfall, 682 S.W.2d 33, 37 n.8 (Mo. Ct. App. 1984) (explaining “chance must be a material element in determining the outcome of a gambling game. It need not be the dominant element.” (Emphasis in original.)).
¶ 24 The third test is the “any chance test.” Edelman, supra, at 663 n.46. As its name suggests, this test finds a contest to be gambling if it involves any chance whatsoever.
¶ 25 This court has not previously adopted any of the three recognized tests for determining whether a contest is one of skill or chance. We find, however, that the predominate factor test is the most appropriate. The any chance test is essentially no test at all, as every contest involves some degree of chance. The material element test depends too greatly on a subjective determination of what constitutes “materiality.” The predominate factor test, in contrast, provides a workable rule that allows for greater consistency and reliability in determining what constitutes a contest of skill. Notably, too, our legislature has used the predominate factor test in other, similar contexts. See
¶ 26 At issue then is whether head-to-head DFS contests are predominately determined by the skill of the participants in using their knowledge of statistics and the relevant sport to select a fantasy team that will outperform the opponent. Several recent, peer-reviewed studies have established that they are. Daniel Getty et al., Luck and the Law: Quantifying Chance in Fantasy Sports and Other Contests, 60 SIAM Rev. 869 (2018); Brent A. Evans et al., Evidence of Skill and Strategy in Daily Fantasy Basketball, 34 J. Gambling Stud. 757 (2018); Todd Easton & Sarah Newell, Are Daily Fantasy Sports Gambling? 5 J. of Sports Analytics 35 (2019).2 In particular, it has been shown that “skill is always the dominant factor” in head-to-head DFS contests involving NBA games. Getty, supra, at 882 & fig. 6; see also, generally, Jeffrey C. Meehan, The Predominate Goliath: Why Pay-to-Play Daily Fantasy Sports Are Games of Skill Under the Dominant Factor Test, 26 Marq. Sports L. Rev. 5 (2015). Indeed, the fact that DFS contests are predominately skill-based
¶ 27 Arguing for a different result, plaintiff points to an Illinois Attorney General opinion letter that concluded DFS contests are illegal gambling under Illinois law.
See 2015 Ill. Att‘y Gen. Op. No. 15-006. However, that opinion did not have the benefit of the more recent research that has established the predominance of skill in DFS contests. Moreover, the opinion relied heavily on a decision from the Texas Attorney General‘s Office, Tex. Att‘y Gen. Letter Op. LO-94-051 (June 9, 1994). Texas employs the any chance test, not the predominate factor test. See State v. Gambling Device, 859 S.W.2d 519, 523 (Tex. App. 1993).
¶ 28 Because the outcomes of head-to-head DFS contests are predominately skill based, we conclude that plaintiff was not engaged in “gambling” with defendant as required under
CONCLUSION
¶ 29 ¶ 30 For the foregoing reasons, the judgment of the appellate court, which affirmed the judgment of the circuit court, is affirmed.
¶ 31 Affirmed.
¶ 32 JUSTICE KARMEIER, dissenting:
¶ 33 Loss recovery statutes, such as
¶ 34 In its opinion, the majority soundly rebuts the appellate court‘s analysis regarding the applicability of
¶ 35 From the outset, I must highlight the impropriety of the majority‘s reliance on scientific studies—that are not found in the record or in either party‘s briefs—to make the factual determination that skill is the predominate factor in a contest. While defendant‘s brief presents a bare assertion that DFS was a game of skill, he fails to support this contention with any authority. Because the studies were not presented at any stage of this litigation, reliance on these studies raises ” ’ “concerns about witness credibility and hearsay normally associated with citations to empirical or scientific studies whose authors cannot be observed or cross-examined.” ’ ” See In re Commitment of Simons, 213 Ill. 2d 523, 532 (2004) (quoting People v. Miller, 173 Ill. 2d 167, 205 (1996) (McMorrow, J. specially concurring), quoting Jones v. United States, 548 A.2d 35, 42 (D.C. 1988)). The
majority should not take the position of an advocate and defend against plaintiff‘s suit by hastily accepting the validity of studies that it searched for outside the record (see People v. Givens, 237 Ill. 2d 311, 324 (2010)), especially considering the majority failed to engage in its own analysis of the studies’ validity or credibility. The injustice resulting from this mistake is exceedingly apparent considering that, under a proper predominate factor analysis, the evidence presented at trial proved that the contest here is clearly a game of chance.
¶ 36 Seemingly, the majority was misled by the authority it references, O‘Brien. In determining that the contest at issue was gambling, the O‘Brien court primarily discussed the findings of a study conducted by an expert witness, who testified in the trial court. See O‘Brien, 89 A.2d 280. But, four years later, the same court found O‘Brien was no longer authoritative in light of the subsequent New Jersey Supreme Court decisions, which collectively have held the test is whether the results predominately depend on chance regardless if skill predominates in the process. Ruben v. Keuper, 127 A.2d 906, 909-10 (N.J. Super. Ct. Ch. Div. 1956). Such analysis is considered a qualitative approach.
¶ 37 Like New Jersey, the vast majority of predominate factor jurisdictions have adopted a qualitative approach. In re Request of the Governor for an Advisory Opinion, 12 A.3d 1104, 1112-13 (Del. 2009); Morrow, 511 P.2d at 129; Seattle Times Co. v. Tielsch, 495 P.2d 1366, 1369 (Wa. 1972) (en banc); Commonwealth v. Plissner, 4 N.E.2d 241, 244-45 (Mass. 1936); Globe-Democrat Publishing Co., 110 S.W.2d at 717 (synthesizing cases from all jurisdictions); see also Banilla Games, Inc. v. Iowa Department of Inspections & Appeals, 919 N.W.2d 6, 10 (Iowa 2018); Opinion of the Justices, 795 So. 2d 630, 641 (Ala. 2001); Lucky Calendar Co. v. Cohen, 120 A.2d 107, 113 (N.J. 1956); Commonwealth v. Laniewski, 98 A.2d 215, 217 (Pa. Super. Ct. 1953); State v. Stroupe, 76 S.E.2d 313, 317 (N.C. 1953); Steely v. Commonwealth, 164 S.W.2d 977, 979-80 (Ky. 1942). A review of these jurisdictions clarifies that, 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. If chance can thwart the participant‘s efforts or skill, it is a game of chance. “It is the character of the game, and not the skill or want of skill of the player, which determines whether the game is one of chance or skill.” (Internal quotation marks omitted.) Stroupe, 76 S.E.2d at 317; see also Globe-Democrat Publishing Co., 110 S.W.2d at 717; Laniewski, 98 A.2d at 217.
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¶ 38 Although scientific studies may aid in this determination, under the qualitative approach, games or contests whose outcome depends on the results of a contingent event out of the participant‘s control, like DFS, are games of chance as a matter of law. See In re Advisory Opinion to the Governor, 856 A.2d at 328-29; Opinion of the Justices, 795 So. 2d at 641. This is so because predictions, regardless of the likelihood of being true, are mere guesses innate with chance. Opinion of the Justices, 795 So. 2d at 641. The knowledge of past records, statistics, contest rules, and other information can increase a participant‘s chances of correctly predicting the result of the event, but it cannot control the outcome, as no amount of research or judgment can assure a certain result will occur. Laniewski, 98 A.2d at 217. No one knows what may happen once the event commences. “What a man does not know and cannot find out is chance to him, and is recognized as chance by the law.” Dillingham v. McLaughlin, 264 U.S. 370, 373 (1924). Thus, skill can improve or maximize the potential for winning in such contests, but it cannot determine the outcome. Commonwealth v. Dent, 2010 PA Super 47, ¶ 22.
¶ 39 While the issue of what constitutes a bona fide game of skill is one of first impression, viewing article 28 of the Criminal Code of 1961 (
¶ 40 After providing the general prohibition of games of chance or skill for money, section 28-1 lists specific activities that constitute gambling, including activities regarding lotteries, bingos, and raffles; “knowingly mak[ing] a wager upon the result of any game [or] contest“; “knowingly sell[ing] pools upon the result of any game or contest of skill“; and “knowingly establish[ing], maintain[ing], or operating an Internet site that permits a person to
¶ 41 Considering that all prohibited activities enumerated in sections 28-1 and 28-1.1 involve outcomes that depend on a contingent event out of the participants’ control, the legislature demonstrated its intent to broadly prohibit activities of that nature. The ”bona fide contest for the determination of skill” must therefore not encompass games of this nature. Rushton v. Department of Corrections, 2019 IL 124552, ¶ 19 (“a fundamental principle of statutory construction is that all provisions of an enactment should be viewed as a whole and words and phrases should be read in light of other relevant provisions of the statute“).
¶ 42 It is true that every game, to some extent, involves chance or an unknown. Nevertheless, no court would doubt that a person participating in a simple human footrace is a game of skill. The critical distinction between a game of chance and a game of skill is the participant‘s ability to overcome chance with superior skill. Dent, 2010 PA Super 47, ¶ 23; Joker Club, L.L.C. v. Hardin, 643 S.E.2d 626, 630-31 (N.C. Ct. App. 2007); see also Lucky Calendar Co., 120 A.2d at 113. Runners can train for severe weather, divert their routes to avoid competitors, or increase their speed to make up for lost time. But a person who places a wager on the race lacks any ability to control the outcome of the race. It is this type of chance inherent in a game, which a person cannot influence, that contributes to the undeniable evils at which antigambling statutes are aimed. See supra ¶ 14; see also Globe-Democrat Publishing Co., 110 S.W.2d at 717; Zellers v. White, 208 Ill. 518, 526-27 (1904). Thus, the exemption under section 28-1(b)(2) may apply only to contests in which the participant‘s own skill has the opportunity to overcome chance.
¶ 43 The majority‘s quantitative approach lacks the foresight to distinguish an activity tactfully camouflaged as a game of skill but whose outcome relies on a contingent event out of the participant‘s control from an activity in which the
participant can use his or her skill to overcome any impact chance may have on the outcome. Besides the downfalls intrinsic in statistical studies,5 their conclusions are often premised on data showing how many times a skilled player wins over the course of many rounds of the game, which—at most—can only theoretically prove if skill
¶ 44 As a result, the majority opinion risks legalizing traditional concepts of gambling anytime a study concludes that it involves skill more than chance. One example is poker. Our courts, like many other courts, have determined poker and other card games to be games of chance despite statistical evidence that skill dominates. People v. Mitchell, 111 Ill. App. 3d 1026, 1028 (1983) (poker); People v. Dugan, 125 Ill. App. 3d 820, 827-28 (1984) (blackjack), rev‘d in part on other grounds, 109 Ill. 2d 8 (1985); Dent, 2010 PA Super 47, ¶¶ 11-23 (collecting cases on poker, electronic poker, slot machines, dice games, shell games, and Keno; concluding poker is a game of chance). Under the majority‘s opinion, however, because studies show skill dominates in poker, these cases are effectively overruled, and poker is now legal. This absurd result could not have been intended by the legislature. See People v. Webb, 2019 IL 122951, ¶ 17.
¶ 45 On the other hand, a qualitative approach focuses on what truly controls the outcome of the activity. As such, it provides a better framework to parse out activities that were intended to be prohibited by article 28.
¶ 46 Applying the proper standard here, a DFS contest is a game of chance. Once a lineup is set and the athletic games commence, the DFS participant cannot influence the athlete‘s performance or how points are accumulated. At this point in the game, the outcome of the contest relies entirely on a contingent event that the participant lacks all control over, and there is no subsequent opportunity for the participant to overcome the chance involved. Accordingly, a DFS contest is a game of chance.
¶ 47 It should be noted, however, that the legislature has since authorized sports wagering, through its enactment of the Sports Wagering Act (Act) (Pub. Act 101-31 (eff. June 28, 2019) (adding
¶ 48 For the reasons stated above, I respectfully dissent.
¶ 49 JUSTICE MICHAEL J. BURKE took no part in the consideration or decision of this case.