DraftKings Wants Early Deal In Illinois Sports Betting Process

It has been a long time coming for Illinois to get sports betting legalized and, unfortunately, COVID-19 put a damper on the opening month of operations. There was plenty of momentum heading in the right direction for sports betting, considering the level of interest happening at the right time before March Madness.

Who knows what could have happened if everything remained the same?

Knowing that the people are hungry for sports betting, DraftKings is trying to be in operation the minute the green light is given. After all, a lot of money has been lost in the absence of sports betting over the last two months. Companies are certainly going to try and recoup for that lost time.

According to the Illinois Gaming Board, DraftKings (Crown IL Gaming LLC) applied for a management services license for sports betting at the end of April. A move like this shows that the company is looking for a quicker way into the Illinois market instead of being in the usual waiting period that online-only sports betting platforms usually do.

FanDuel is trying to get a comparable partnership or purchase deal from Fairmont Racetrack.

While DraftKings does not have a concrete partner just yet, Harrah’s Joliet, Jumer’s Rock Island, and the Casino Queen have yet to publicly announce who their online partners are – all three could possibly already be in cahoots.

Interestingly enough, Harrah’s Joliet is owned by Caesars, which has an agreement to offer “market access for online gaming products.” Going down another rabbit hole, Jumer’s is owned by Delaware North, which is partnered with IGT in West Virginia – IGT is partnered with DraftKings at Scarlet Pearl in Mississippi.

Try To Go Live With Mobile

If FanDuel does indeed get a deal, DraftKings could likely try and go live with mobile sports betting ahead of the waiting period allowed for mobile-only operators. According to a new law, mobile-only platforms are prohibited from applying for a sports wagering license until the first sports betting license is issued in the state.

None of these have been issued yet, although both Rivers Casino and Argosy at Alton went live with betting at brick-and-mortar locations under the temporary operating permits that were issued at the beginning of March.

There are five other casinos that were granted temporary operating permits, but none have been approved for betting just yet.

This waiting period has been called the “penalty box” and was created to have national, mobile-only operators (namely DraftKings and FanDuel) out of the market for at least 18 months so that the retail locations can get a head start on opening up the business.

According to the law, mobile platforms need to be operated under ownership that has at least 80 percent of the ownership in a casino within Illinois state borders. At this time, neither DraftKings or FanDuel are in that stratosphere.

There is a $10 million difference between offering sports betting through an owners license and online-only methods. Not to mention, there is a $10 million application fee for an owners license vs. $20 million for an online-only license.

This could wind up being better suited for DraftKings or FanDuel, or really any online-only operator, to buy real property or have a stake in another company than to pay the $20 million fee.

Illinois has some interesting ideas that other states don’t have tied to them just yet. Some of the most notable sporting venues, United Center – home of the NBA’s Chicago Bulls – and Wrigley Field – home of MLB’s Chicago Cubs – are scheduled to be locations where bettors can place their wagers.

The state ruled that venues with large seating capacities were a fit place to accept bets.

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Logan is based in Los Angeles and is an avid poker player having played in tournaments across the globe. He covers both poker & regulatory affairs.