In Illinois, horse racing events are currently taking place at racetracks — only without fans. And just last week, Gov. J.B. Pritzker did not renew an executive order that allowed consumers to register for Illinois online sportsbooks on mobile devices, from wherever they may reside or move about the state. Consumers now have to physically enter a casino’s sportsbook to register for online or mobile platforms.
Put those two facts together and it raises this question: How will consumers register for mobile sports betting platforms that are partnered with racetracks in Illinois? Fans aren’t allowed on premises, yet they must appear in person to register.
The answer isn’t just relevant — it’s about to be crucial. On Thursday, the Illinois Gaming Board will consider Hawthorne Race Course’s Master Sports Betting License application. Neither of the other two racetracks, Arlington Park and Fairmount, are on the agenda for license consideration. Should Hawthorne’s application be approved — and there don’t appear to be any obstacles — the Race Course and operating partner PointsBet will be nearly poised to offer live sports betting in Illinois.
But how?
OTBs will serve as key online registration locations
Consider this — Hawthorne, like other racetracks in Illinois, has off-track betting parlors (OTBs). And in our current wacky, warped COVID-19 world, those venues may suddenly be priceless. OTBs operate under food-and-beverage licenses, which allows them to be open during present pandemic circumstances. And that would seem to mean would-be bettors could walk into the OTBs — many of which will have retail sportsbooks — and register for mobile sportsbook accounts.
There are currently 24 OTBs active in Illinois, according to the Illinois Racing Board, and up to 43 are authorized in the state. But the statute legalizing sports betting would only allow each racetrack to designate three each for sports betting. According to the law:
An individual must create a sports wagering account in person at a facility under paragraph (1) or (2) of subsection (d) to participate in sports wagering offered over the Internet or through a mobile application.
Section 25-30 (d)(2) of the Sports Wagering Act provides as follows:
“3 inter-track wagering locations if the inter-track wagering location licensee from which it derives its license is an organization licensee that is issued a master sports wagering license.
If Hawthorne gets licensed Thursday, it would meet the requirements to designate three of its OTBs for sports betting. Hawthorne and PointsBet have yet to reveal which of its 11 OTBs will house sportsbooks.
Then there is the question of in-person registration at the tracks themselves. At Hawthorne, a temporary sportsbook will be open ahead of the casino that has been approved for the site. The temporary book will likely be on the minimalist side, catering only to those interested in sports betting. The bigger casino project it hopes to have approved for the site will ultimately house a state-of-the art sportsbook.
Officials at both Hawthorne and the Illinois Gaming Board (IGB) aren’t sure if consumers will be able to walk into the temporary sportsbook being built out at Hawthorne under the current COVID-19 restrictions.
“In-person registration at tracks would be dependent on whether their proposed methods for having people on property are in compliance with Illinois Racing Board orders and any other orders or guidance from other state agencies in connection with public gatherings,” an IGB spokesperson said.
Racetracks have two regulatory boards to answer to — the Illinois Racing Board and the IGB.
PointsBet, DraftKings next in line to go live?
As of today, the only mobile sports betting live in Illinois is BetRivers, via the Rivers Casino in Des Plaines. Both Rivers Casino and the Argosy, powered by Penn National, opened in March for retail sports betting. But once Hawthorne gets its Master Sports Betting License, it will be one of two venue-operator pairs that require just one more step to take before going live. In order for an operator to go live, it must have a Temporary Operating Permit (or license), the venue must have a Master Sports Betting License, and the venue must be approved for wagering.
Five casinos, including the Casino Queen, which has partnered with DraftKings, currently have licenses, but have not been approved for wagering. Hawthorne would be the first racetrack to be licensed. Operators BetRivers, DraftKings, FanDuel, Penn Sports Interactive, and PointsBet have been awarded Temporary Operating Permits.
Banner up!#draftkingsatcasinoqueen #sports pic.twitter.com/9OfHsq9Rvj
— DraftKings at Casino Queen (@DKatCQ) July 24, 2020
From here, DraftKings and PointsBet must now send the Illinois Gaming Board a letter requesting to “commence sports betting.” Here’s how this process is outlined in the IGB’s sports betting regulations:
A master sports wagering licensee may request that the Administrator grant provisionary approval to commence sports wagering while the licensee is not fully compliant with the Act and this Part. The request must be in writing, and include the following:
1) An itemized description of the provisions of the Act or this Part with which the licensee is not in compliance;
2) A detailed explanation of the licensee’s plans to come into compliance with each provision identified under subsection (d)(1), including dates certain by which compliance will occur; and
3) A description of what steps the licensee shall take to minimize the risks to the integrity of the sports wagering operation during the period of time in which the licensee is not in compliance
Operators drive process to go live
PointsBet can’t send the letter until Hawthorne gets its approval on Thursday, and it appears that DraftKings, which was awarded its Temporary Operating Permit on July 17, has yet to submit a request. Casino Queen got its Master Sports Betting license on June 11.
There is no way to know exactly how long it will take for the IGB to review and approve a “commencement for gaming” request — and there are different requirements for retail vs. digital launch — but for reference, Rivers Casino received its Master Sports Betting License on June 11 (it had a temporary permit prior) and by June 18, BetRivers was taking sports bets via its mobile/online platform.
Fast forward five years, and we finally have a sports betting law in Illinois.
The catch?
No online registration for 18 months unless you have a brick and mortar presence.
The winner?
Rivers Casino, who got the first license. 3/
— Justin Van Zuiden (@stlcardinals84) July 27, 2020
Thursday’s IGB meeting promises to be interesting. Besides considering licenses, the IGB will discuss its emergency online branding rule, which has been a source of confusion and a flashpoint for some time. The IGB in late May proposed emergency rules to clarify some branding issues with regard to mobile sports betting. The “emergency” label means the rules would go into effect immediately. Shortly after the proposal was made public, Rush Street Interactive (Rivers Casino) sent a challenge letter. RSI argues that sports betting rules don’t fit with the definition of an “emergency.”
Wrote attorney Paul Gaynor on behalf of RSI: “1. There Is No “Emergency” to Adopt Branding Rules No current “threat to the public interest, safety, or welfare,” see 5 ILCS 100/5-45(a), justifies the Board’s attempt to pass emergency branding rules. While, in some cases, the Board “may” adopt emergency rules relating to the Act, see 230 ILCS 45/25-15(b), an actual emergency must exist.”
In addition, Gaynor argues that there is no ambiguity in the law with regard to branding:
Sections 25-30(e) and 25-35(e) of the Act unambiguously require that internet and mobile sports wagering “shall only” be offered under the “same brand” as an Illinois licensed track or casino (such as the Rivers brand), or a brand owned by certain related entities at the time the Act was passed: The sports wagering offered over the Internet or through a mobile application shall only be offered under either the same brand as the owners licensee is operating under or a brand owned by a direct or indirect holding company that
owns at least an 80% interest in that owners licensee on the effective date of this Act.
RSI declined to comment on the challenge letter. Eight other Illinois casinos signed a letter from the group iDEA Growth supporting the proposed changes.
How the IGB will handle the challenge remains to be seen. Should it choose to move forward with its proposed emergency rules, the rules will be sent to the legislature’s Joint Committee on Administrative Rules, which would have to make the change to the existing legislation. JCAR’s next meeting is set for Aug. 11, and multiple sources say the IGB has not requested that its proposed rule be considered at that meeting nor does it appear on the JCAR agenda.
Chris Altruda contributed to this report
