Sports betting operator DraftKings has found a way around Illinois rules aimed at delaying the entry of online-only sportsbooks into the state’s regulated wagering market.
Two weeks ago, DraftKings filed papers with the Securities and Exchange Commission (SEC) detailing plans by company insiders to unload some of their shares while the price was still in the post-IPO stratospheric range. But the filing also contained an update on the company’s Illinois opportunities.
As first noticed by Sportico, the filing notes that on June 10, DraftKings “entered into a multi-year arrangement with Casino Queen Inc. for retail and online sportsbook services providing us access to the Illinois market.” Casino Queen, an employee-owned venue in East St. Louis, was among the recipients of an Illinois ‘master betting license’ earlier this month.
The betting legislation that Illinois approved last year called for an 18-month delay between the launch of retail betting and the launch of a maximum three online-only licensees. This ‘time out’ was intended to allow the state’s brick-and-mortar casinos a window in which to establish relationships with local bettors before the big boys rolled in from out of state and sucked all the oxygen out of the room.
The legislation did permit online-only operators to partner with local casinos, but their online product would have to operate under the local casino brand. So whenever DraftKings’ Illinois site/app launches, it will feature Casino Queen branding.
Sticking with the royal theme, in April, a DraftKings offshoot called Crown IL Gaming LLC filed an application for a management services license with the Illinois Gaming Board. So we can likely expect lots of stealth marketing featuring not-so-vague references to ‘Kings & Queens’ to accompany the launch. (Seriously, has anyone contacted Harry & Meghan regarding possible brand ambassador roles?)
DraftKings’ SEC filing indicated that the Casino Queen deal will last anywhere from 5-10 years and will be exclusive in the state. DraftKings will pay Casino Queen “a fee based on a percentage of net gaming revenue generated by gaming activities in that state.”
Illinois welcomed its first online betting operator earlier this month when Rush Street Interactive launched its BetRivers.com app/site in partnership with Rivers Casino Des Plaines. Under the original betting legislation, customers were required to sign up via the land-based gaming partner but this rule was waived due to COVID-19.