DraftKings is looking at an early entry in Illinois for sports betting. DraftKings applied for a management service licensees for sports betting on April 28, according to the Illinois Gaming Board. They don’t look like they want to wait for mobile betting in Illinois. This might be better off trying to establish themselves, especially around Chicago.
This comes on the heels of their competitor FanDuel, also trying to enter Illinois’ sports betting market. In March, we learned FanDuel was looking to purchase Fairmount Racetrack.
DraftKings and Harrah’s
DraftKings will be looking for a partner if they enter Illinois. Also, they should find a casino in the Chicagoland area. This will help gain attraction from the city and surrounding suburbs, which will help bring in revenue.
Right now, one popular target would be Harrah’s Joliet. Harrah’s is now owned by Caesar’s, who is one of the largest gaming companies in the world. The partnership would help launch DraftKings in an already popular casino.
Joliet is about an hour outside of Chicago, and right in between the south and west suburbs. Multiple expressway’s and train stops make this an easy way for sports bettors to get to the sportsbook.
Harrah’s Joliet is the second most profitable casino in the state. If DraftKings is able to partner up with Harrah’s and Caesar’s to put their sportsbook in there, then it will be a huge hit for sports bettors in the Chicagoland area.
Obstacles for Mobile Companies
Right now, DraftKings and FanDuel have some obstacles to get through before they can set up shop in Illinois. Both companies would be in the “penalty box” before they get a chance to open their own book in the state.
The Penalty Box is an 18-month waiting period before nationwide mobile betting sites (DraftKings and FanDuel) can enter the market. This allows local business to get their shops up and running, so the playing field is more level.
In Illinois, Rivers and Argosy have temporary Illinois sports betting license’s. They could get a permanent license on June 11 the next time the Illinois Gaming Board hosts their meeting. If they approve a permanent license for Rivers and Argosy, then that starts the clock for mobile betting sites.
Both FanDuel and DraftKings would have to wait 18 months starting June 11 before opening up their sportsbook in the state.
However, there is one way around it.
Mobile sportsbooks can wait the 18-month period before they can start operating in Illinois. There is one loophole to this rule.
According to the law:
“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.”
Right now, FanDuel and DraftKings don’t own 80 percent of a casino, but they’re looking to do so if it means sportsbook operations in Illinois.
Back in March, FanDuel was in the process of partnering with Fairmount Racetrack in Illinois. If they go into partnership the with track, and own 80 percent of the operations, then they’ll be able to set up shop here in the state.
This will give FanDuel a huge competitive edge over DraftKings and other local books, as they’ll be the biggest competitor Illinois has. This is probably why DraftKings is looking to do the same thing.
On top of that, the licensing fees look a lot different for mobile betting. An online only license costs $20 million, and an owners license costs $10 million. The $10 million difference, and the shot at getting into the state early may be worth a partnership for mobile companies.