Sports Betting Giants Strike Deals for Early Illinois Entry
FanDuel will tie its fate to Fairmount Racetrack (l.), while DraftKings will work with an unidentified casino. In both cases, the moves offers quicker access to the Illinois sports betting market.
When Illinois adopted rules for sports betting, the state included one that requires mobile-only sportsbooks to wait until the first brick and mortar location obtained a license before applying for its own license.
The idea was to keep FanDuel and DraftKings from going live before the mandated waiting period, using their daily fantasy sports database to get the jump on the land-based operations.
But the rules also included an out: the FanDuels and DraftKings of the world could hook up with an eligible gaming company and get a license quicker and for less money, which is what FanDuel and DraftKings are aiming for. FanDuel is pursuing a partnership or a purchase of Fairmount Racetrack.
Now comes word that on the Illinois Gaming Board website, DraftKings applied for a management services license for sports betting on April 28. Though not spelled out, partners could be Harrah’s Joliet, Jumer’s Rock Island, or the Casino Queen.
The company told Sports Handle it had no comment about such plans.
While no permanent license has been issued by the board, yet, Rivers Casino and the Argosy at Alton went live with retail sports betting under temporary operating permits in early March, days before the Covid-19 pandemic shut down professional sports and gaming across the U.S.
Five other casinos have been granted temporary operating permits, but have not yet been approved for betting.
Rivers and the Argosy could get their permanent licenses at the June 11 Illinois Gaming Board meeting. If so, the clock would start ticking for online-only platforms. From the date the first license is issued, the state gaming board has up to 18 months to accept licenses from online-only operators, and another 90 days to announce which would be approved. So the earliest an online-only sportsbook could accept bets is early 2022.
The online waiting period has earned the nickname the “penalty box,” and is designed to give local retail sportsbooks a head start to establish themselves.
Another point of differentiation for partnerships or owner participation: the application fee for an owner’s license is $10 million while the online-only fee comes to $20 million.
It could prove more cost effective for FanDuel, DraftKings, or any other potential online-only operator to buy real property or a stake in another company rather than pay the $20 million fee.