If everything goes as planned, FanDuel will join the ranks of live Illinois sportsbooks by the start of football season, but it will do so with its “Plan B.”
According to sources, FanDuel will launch its digital sports betting app through its partnership with Boyd Gaming, owners of the Par-A-Dice Casino in East Peoria. As of Wednesday morning, Par-A-Dice had not filed its request to commence sports betting with the Illinois Gaming Board. The IGB has been taking two-to-three weeks to approve go-live requests.
FanDuel was awarded its Temporary Operating Permit on July 17. Read about the site’s online product, already live in other states, in our comprehensive FanDuel review.
The decision to go live with Par-A-Dice is a departure from FanDuel’s initial plan in Illinois. In this scenario, the DFS-turned-sports betting giant will have to co-brand with Par-A-Dice, rather than being the lead brand in advertising. FanDuel initially planned to launch Illinois sports betting with Fairmount Park, and in January, Fairmount filed with the Illinois Secretary of State to change its name to “FanDuel Sportsbook and Horse Racing.” By doing so, FanDuel would have been able to advertise with its name and logo in the top position. Going forward, FanDuel still plans to have sports betting at Fairmount, but the track does not have its Master Sports Betting License yet, so in an effort to get to market faster, FanDuel is exercising its option to enter Illinois with Par-A-Dice.
When all is said and done, FanDuel could potentially have two retail sports betting locations and two online partners — through both Par-A-Dice and Fairmount Park.
DraftKings made a similar move earlier this year, partnering with the Casino Queen in East St. Louis. The casino changed its name to DraftKings at Casino Queen, and DraftKings went live with mobile and retail sports betting on Aug. 5.
Detours around the ‘penalty box’
FanDuel and Boyd Gaming entered into a partnership for sports betting in 2018. The pair have partnered to launch retail and mobile sportsbooks in Indiana, Iowa and Pennsylvania. FanDuel was first to market in Pennsylvania and has the biggest market share in the state while DraftKings was first in Indiana, and has the biggest market share there.
Both FanDuel and DraftKings made the partnerships as a way to circumvent the so-called “penalty box” in the Illinois law, which requires digital-only sportsbook platforms to wait at least 18 months after the first retail sports betting license was issued to go live. After that period, Illinois’ requirement for in-person registration for mobile/online platforms would sunset, meaning that customers would have the ability to register for accounts from their computers or mobile devices anywhere in the state.
New #GambleOn! @AlTruda73 joins us to talk about Illinois' messy sports betting rollout, plus @BergenBrennan & I cover NBA BetStream launch, Detroit casinos' 15% cap, FanDuel soccer controversy, NBA/NHL/PGA picks, and poker's Wilford Brimley:https://t.co/5uv1gC269H
— Eric Raskin + (@EricRaskin) August 6, 2020
By partnering with brick-and-mortar locations, DraftKings and FanDuel are able to launch sooner. The provision was designed to give local operators a head start, and keep the pair from immediately capitalizing on their customer databases.
In addition, by partnering with brick-and-mortar locations, DraftKings and FanDuel save $10 million in licensing fees: a mobile-only master license comes with a $20 million price tag as compared to $10 million for a Management Services Provider license.
The 18-month “penalty box” represented a compromise brokered by lawmakers. During the legislative process, Rush Street Interactive, owner of the Rivers Casino — Des Plaines — argued that DraftKings and FanDuel were operating daily fantasy platforms illegally in Illinois and should be penalized.
According to a 2015 Illinois attorney general’s opinion, the companies were both operating illegally in Illinois before — and continued to do so after.
Illinois battle for remote registration
Illinois law requires sports bettors to register in person for a mobile/online account, but during the height of COVID-19 restrictions, Gov. J.B. Pritzker rolled back that requirement on June 4, and for about two months, sports bettors could register for digital platforms from their computer or mobile device. But Pritzker did not renew the order in July, and stakeholders were vocal in their disapproval.
But by the time DraftKings opened its East St. Louis sportsbook, in-person registration was back. The company — in addition to a group called “Fans for the Future” — is now trying to rally its customers to lobby Pritzker to reinstate mobile registration.
Take the 5 seconds to click the button and send emails to Gov. Pritzker and company.
Renew Mobile Sports Betting Registration from Home https://t.co/PrNiwIz82r
— Ryan Noonan (@RyNoonan) August 19, 2020
If that happens, FanDuel will want to launch as quickly as possible. In states with mobile registration, being first to market is of paramount importance in relation to dominating a market. So far, Rush Street Interactive’s BetRivers has had a two-month advantage for remote registration and until early August was the only mobile/online platform available in the state.
It’s unclear what the hold up is with Fairmount Park, which has not been granted a Temporary Operating Permit. The only racetrack that has been awarded a sports betting license is Hawthorne Race Course, which partners with PointsBet Sportsbook. The company has its Temporary Operating Permit, but Hawthorne has not yet filed its request to commence wagering.