As “royal” marriages go, Illinois sports betting fans may have something to cheer about.
DraftKings appears to have moved ahead of FanDuel in the race to enter the potentially very lucrative sports betting market in Illinois, having reached an agreement with Casino Queen in East St. Louis.
This story was first reported by Sportico.
“DraftKings can confirm it has a market access deal with Casino Queen per our recent S-1 filing on June 16, 2020,” spokesperson Randy Crader told SportsHandle via e-mail Tuesday. “We look forward to working with both the Illinois Gaming Board and Casino Queen to bring our legal sports betting product to Illinois.”
Deal is a workaround to ‘penalty box’
The filing also stated the agreement, one of seven with casinos across the country, was a “multi-year (5-10 years) business partnerships established with land-based licensed casinos in each of their respective states.”
It also states in the “terms of these agreements, DraftKings has agreed to operate exclusively through the casino in such state for either retail or online or both.”
DraftKings seems to find a creative back door solution into Illinois sportsbetting market through Casino Queen master license and avoid the 'bad actor' clause. The bad actor clause was setup to prevent those blacklisted DFS entities from coming into the state for 18 months. pic.twitter.com/Jtx17WNdZ3
— dividendblower (@dividendblower) June 30, 2020
Both DraftKings and FanDuel have been looking for workarounds to the “penalty box” provision that was part of the expanded gaming bill Gov. J.B. Pritzker signed into law last June. That provision stated stand-alone mobile sportsbooks would have to wait 540 days (18 months) to apply for a license after the first sports betting license was granted to a land-based retail sportsbook operator, and pay $20 million for the license. The Illinois Gaming Board then has another 90 days to select three operators to be awarded online-only licenses. The delay gives bricks-and-mortar operators with mobile/online offerings at least a 21-month head start.
FanDuel has been in talks to purchase Fairmount Park, one of three horse racing tracks in Illinois to apply for a sports betting license. It’s likely that deal will come to fruition sooner than later, considering that according to an industry source, there is heavy speculation that DraftKings is aiming to go live in mid-July. FanDuel will do all it can to match their key competitor, as it’s already been shown that being first to market is critical in terms of capturing market share.
Prtizker’s executive order changed Illinois landscape
That 540-day clock finally started June 11 when the Illinois Gaming Board granted seven Master Sports Wagering licenses, including one to Casino Queen. Additionally, Crown IL Gaming, doing business as DraftKings, applied for a Management Services Provider license in late April.
— iDEA Growth (@iDEA_Growth) June 5, 2020
Those licenses were granted one week after Pritzker issued Executive Order 2020-41, suspending the in-person registration requirment for mobile sports wagering, citing the impact of the COVID-19 pandemic that forced the closure of casinos in the state. Patrons are no longer required to appear in person to register for sports wagering accounts and may do so online.
Following Pritzker’s order, Rivers Casino, which was the first to accept legal sports bets in Illinois in March, was also the first to market for online betting via BetRivers earlier this month.
Rebranding? Launch timelines? Hard to tell for both
It is impossible to predict when DraftKings would actually enter the Illinois sports betting market, even with recent IGB machinations to streamline the process. On June 3, the day before Pritzker’s executive order, the regulatory body proposed an emergency rule change related to branding for mobile and internet sports betting, aiming to clarify distinctions for casinos and sports venues.
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— Casino Queen (@Casino_Queen) June 22, 2020
This directly impacts DraftKings’ agreement with Casino Queen in terms of rebranding. There appear to be two options available, the first in which Casino Queen could rebrand itself using DraftKings’ name. In such an instance, Casino Queen could become the “DraftKings Casino Queen Sportsbook.”
The second option is one in which DraftKings lists itself second behind Casino Queen, which is not the most attractive choice to an operator with DraftKings’ extensive reach. Using this choice, Casino Queen could become “Casino Queen Sportsbook powered by DraftKings” with Casino Queen branding apparent on DK’s app.
Evidently, in light of the alteration to the in-person registration requirement, this is the more attraction option than waiting for the expiration of 540 days for a $20 million online license that allows DraftKings to brand without limitation and avoid having to share revenues.
When all is said and done, Illinois could have up to 23 online/mobile platforms — the state’s 10 casinos, seven professional sports venues and three racetracks are each entitled to one mobile skin, plus the three stand-alone mobile platforms.
“I remain optimistic that Illinois will be one of the most competitive and innovative sports betting markets in the country thanks to the landmark legislation passed in 2019,” Illinois state Rep. Mike Zalewski, a key player in creating sports betting legislation, told SportsHandle via e-mail.
In addition to the seven licenses granted, the IGB also gave Administrator Marcus Fruchter expanded powers at this month’s meeting. He has the ability to adopt and file emergency rules and the authority to issue licenses for the Sports Wagering Act to “all individuals and entities already licensed by the Board and to make all suitability findings and approvals necessary there, too.”