Illinois Rivers Attorney Challenges Co-Branding Rule
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A Rivers Casino attorney has submitted a public comment challenging the Illinois Gaming Board’s proposed rule on branding. The challenge could slow down online sports betting in Illinois.
DraftKings is partnering with Casino Queen in East St. Louis, Illinois. The mobile betting company found an apparent loophole in the “penalty box” period set up by the state after DraftKings and FanDuel were operating illegally in Illinois, according to former Attorney General Lisa Madigan.
Now, BetRivers believes that DraftKings is violating the penalty box rule, and is challenging the IGB’s co-branding rules. Illinois began taking bets in March before COVID-19 shut down the state. Governor J.B. Pritzker then signed an Executive Order allowing bettors to sign-up online.
BetRivers became the first online sportsbook in Illinois.
The Effect on DraftKings
Casino Queen was one of seven casinos that the IGB was granting sports betting licenses to in Illinois. Shortly after, DraftKings and Casino Queen formed a partnership under the IGB’s co-branding laws, which was a loophole for mobile betting companies to work around.
The loophole was found to get around the “Penalty Box” period for mobile betting companies. Online wagering sites like DraftKings and FanDuel have to wait 18-months, or 540 days before they can enter the Illinois market due to IGB laws. However, under co-branding laws in Illinois, DraftKings was able to exploit the “Penalty Box” period, which allows them to form a co-branding partnership with the casino.
Now, the IGB is looking to craft new emergency gaming rules to override the current branding rules. The IGB might not have a reasonable cause to craft emergency laws around it. Also, the new rule would allow casinos to use the rebranding name, or put the operator name second.
The “Penalty Box” period goes back to 2015 when DraftKings and FanDuel were operating illegally in the state, which is when Madigan began implementing the rules for them. Now, the branding rule allows mobile operators to take advantage of entering the market despite the “Penalty Box.”
It gives third-party operators the ability to co-brand with racetracks and casinos while the IGB scrambles to re-write rules, which may not hold up constitutionally.
The Future of Illinois Sports Betting
After what was a promising launch of mobile sports betting, everything could come to a halt. The public comment challenging the IGB branding rules could slow down mobile betting in Illinois until it is resolved. BetRivers could be the only mobile betting operator in the state while lawmakers address the legal issues.
DraftKings still needs time to set up mobile operations. They will look to work quickly so they can launch a mobile product before time runs out. There is no telling what will happen with the public challenge right now.
However, this could slow the betting industry in Illinois. If only one mobile betting site is operating in Illinois, then it could cause problems for bettors. Also, the legal issues surrounding branding on mobile betting could detract potential sportsbooks from Illinois. The state will have a hard time bringing in companies if the rules continuously change.
Right now, mobile will continue to operate unless the IGB and state lawmakers here the public comment and do something about it. DraftKings will look to get betting up and running soon, so there is a chance that this issue passes. There is no telling what will happen next, but this is just another hurdle for Illinois bettors to get over.
