DraftKings CEO and co-founder Jason Robins on Monday morning fired off some harsh words showing that he is unappreciative — to put it mildly — of competitor Rush Street Gaming’s jockeying in the Illinois sports betting field. This comes on the heels of Gov. J.B. Pritzker on Friday rolling back the requirement that patrons must register for sports betting accounts in person, which Rush Street, operator of the Rivers Casino BetRivers online sportsbook, had favored.
DraftKings declined Sports Handle‘s request for comment on Robins’ remark, which he posted at 7:57 a.m. ET Monday and deleted approximately two hours later.
Rush Street Interactive, clearly none too happy about the name calling, offered this response to Sports Handle Monday afternoon: “Rush Street has never been asked to leave a state, pays taxes on every wager, and has not been named in multiple consumer class action suits.”
Among the replies to the short-lived tweet were those from would-be sports bettors all but begging DraftKings to come online in New York, Virginia, California, and Massachusetts. Among those states, mobile sports betting is legal statewide only in Virginia, where legal sportsbooks are on track to go live in November or December.
DraftKings last week mounted a grassroots campaign to encourage patrons to advocate for the reinstatement of an order to allow remote registration, meaning customers may establish accounts via mobile devices and computers. Pritzker initially rolled back the in-person registration requirement on June 4, citing public health and social distancing measures amid the COVID-19 pandemic. But on July 27, the order lapsed when Pritzker did not renew it. Subsequently, on Aug. 5, DraftKings at Casino Queen, located in East St. Louis, launched the DraftKings at Casino Queen Sportsbook online.
The order issued Friday will lapse on Sept. 19 if not renewed again.
Remote registration will benefit DraftKings
I think people sometimes underestimate the impact / relevance of grassroots activity on these issues.
There’s a reason why FD and DK typically fire up the customer base outreach machine when a state is getting close to legalization. Provides cover for pols if nothing else. https://t.co/zlU4cblwXq
— Chris Grove (@OPReport) August 24, 2020
The flip-flopping situation in Illinois has been challenging for operators, who are getting mixed signals from one of the biggest, most anticipated markets to go live.
“Illinois continues to triumph in bad policy,” said consultant Brendan Bussmann of Global Market Advisors. “Creating an anti-competitive market should never be the goal of any stakeholder, especially when it comes to sports betting. Playing pandemic political games that circumvent legislative intent through executive overreach is just as bad. Let’s hope that this latest flip flop is the last in Illinois as it has turned into its own game of Russian table tennis.”
When Pritzker initially allowed remote registration in June, BetRivers was the only digital platform live in Illinois. The company had an online sports betting monopoly for about two months. That window closed in late July when Pritzker did not renew the order. DraftKings and other companies have been lobbying Pritzker ever since. The argument is simple: At a time when public health officials are encouraging people to social distance or stay at home to limit the spread of a highly contagious virus, why force them to expose themselves to infection at a casino, when they could easily register at home?
“First and foremost, mobile registration and filling of accounts can and should be used as sports betting expands across the country,” Bussmann said. “It allows you to compete against the black market, provides convenience to the customer, and allows for a dynamic, competitive market.”
Whatever spurred Pritzker’s change of heart, it most certainly benefits DraftKings, which is located about five hours south of Chicago, Illinois’ biggest population center. Though it is in Illinois, DraftKings at Casino Queen is located in the St. Louis metro area, while the Rivers Casino is less than a 10 minute drive from Chicago’s busy O’Hare International Airport.
With the geographical advantage neutralized, at least for one month while the order is back in effect, DraftKings stands to make a furious rush at market-leader status with the NFL season less than three weeks away and sports fans/bettors hungry to try new legal sportsbooks.
History of rivalry between operators in Illinois
The rivalry pitting DraftKings and competitor FanDuel against Rush Street Gaming has roots in daily fantasy sports contests. Both DraftKings and FanDuel have been operating DFS sites in the state for more than five years. In 2019, when Illinois lawmakers took up sports betting, Rush Street lobbied lawmakers to penalize the pair for operating in spite of the former Illinois attorney general’s opinion in 2015 that DFS constituted illegal gambling.
Lawmakers ultimately included a provision in the sports betting law dubbed the “penalty box,” which requires companies launching digital-only platforms — i.e. not partnered with a brick-and-mortar casino — to wait at least 18 months before applying for a license, and up to another three months before receiving one. The idea was to keep the DFS companies from leveraging their databases for sports betting. There is also a significant difference in the price of licenses — $10 million for a physical sportsbook with a digital platform, and $20 million for an online-only license.
But the COVID-19 crisis as well as some creative thinking allowed DraftKings to break into the market much earlier. The company partnered with Casino Queen, which renamed itself earlier this year, and in early August DraftKings at Casino Queen Sportsbook took its first bet.
FanDuel was heading down a similar path with Fairmount Race Course, but the racetrack hasn’t been licensed for sports betting yet, so FanDuel is now looking to go live with a retail partner, the Par-A-Dice Casino. FanDuel may accomplish that through a partnership with Par-A-Dice owner Boyd Gaming, but it means FanDuel won’t get top billing in marketing materials. (For example, the platform may be advertised as Par-A-Dice Sportsbook powered by FanDuel.)
Pritzker’s latest move will put added pressure on FanDuel to launch. The company has a Temporary Operating Permit through the Illinois Gaming Board, but Fairmount has not been licensed. Because of that, FanDuel will pivot to Par-A-Dice, which is licensed but does not yet have Provisional Wagering Status. As of Friday, Par-A-Dice had not submitted its request to commence wagering with the IGB. Once it does, the agency estimates it will take two to three weeks to approve it. The NFL season starts on Sept. 10.
It’s been a busy year for DraftKings — besides all the action in Illinois, the company went public in April.
