DraftKings Slips Through Side Door in Illinois
Online gaming giant DraftKings has found a way to legally circumvent an law that gives retail casinos a leg up on sports betting in Illinois. DK has partnered with Casino Queen (l.) to provide both mobile and retail betting, for a cut of the revenues.
When Illinois lawmakers designed sports betting regs, they included a provision which prevented online giants like DraftKings from applying for a license for 18 months after the first sportsbook got its license. The purpose was to give brick and mortar casinos a chance to establish themselves as bookmakers.
But the law also had a loophole if companies like DraftKings could partner with a brick and mortar casino, according to Sportico.
They did just that by striking a deal with Casino Queen in East St. Louis, according to a recent SEC filing. The partnership should allow DraftKings to skirt the part of the legislation known as the penalty box. DraftKings will operate the casino’s mobile and retail betting, in exchange for an undisclosed percent of net gaming revenue.
“We look forward to working with both the Illinois Gaming Board and Casino Queen to bring our legal sports betting product to Illinois,” DraftKings said.
The agreement means early access for DraftKings into one of the country’s largest sports betting markets, one which could reach $1 billion in annual sports betting revenue, according to Eilers & Krejcik Gaming.
The workaround also saved DraftKings from having to shell out $20 million for the right to wait 18 months to launch sports betting. Casinos pay $10 million for a license.
DraftKings declined to provide an exact timeline.
BetRivers is currently the only online betting platform live in Illinois after it launched in June.
Another company trying to get around the penalty box, FanDuel, has talked about buying Fairmount Park, one of three horse racing tracks in Illinois to apply for a sports betting license. The deal could drop sooner than later since DraftKings may go live by mid-July.