The Illinois Gaming Board (IGB) has published applications for three online-only sports betting licenses. Applications are due by Dec. 3, and licenses cost $20 million apiece.
Once the IGB issues a mobile-only license, in-person registration is over. If there are any applications, the IGB must announce whether or not there are qualified bidders. This would likely happen around Dec. 3.
Within 90 days after that, the IGB must determine the winning bidders. Then, the agency must complete individual investigations before issuing a license. If all goes according to plan, it would seem that in-person registration would end in the first half of 2022.
However, there is doubt that any operator will fork over the $20 million necessary for a mobile license.
Zalewski doesn’t expect anyone to bid on a mobile-only license
Illinois House Rep. Michael J. Zalewski told PlayIllinois in June that he doesn’t see anyone paying the hefty $20 million fee it would take to secure an online-only license. If that’s the case, the return of online registration could be delayed indefinitely. Zalewski said he is frequently asked by operators for the Illinois Legislature to lower the price.
A typical sports wagering license in the state may not exceed $10 million. The $10 million gap is significant, and the pool of prospective bidders is not the same as lawmakers thought it would be when they drafted the Sports Wagering Act.
Then, the mobile-only licenses were designed to be carrots for DraftKings and FanDuel to enter the Illinois market. Instead, DraftKings and FanDuel found loopholes, partnering with a casino and a racetrack to secure market access.
And with the COVID-19 pandemic causing Illinois Gov. JB Pritzker to suspend in-person registration for seven-plus months, DraftKings and FanDuel now have booming businesses in Illinois. And if they won’t bid for the mobile-only licenses, who will?
Beyond that, any bidder will be doing DraftKings, FanDuel, Barstool, etc., a huge favor if they pay the $20 million for a license. One could see why that may not be an enticing proposition.
With that said, it is Illinois, which is now finishing second or third in the US on a monthly basis in sports betting handle. Perhaps someone will determine the $20 million price tag is worth it anyway.
This will be the biggest story in Illinois sports betting over the next several months. Whether someone does or does not bid on the license will have a huge ripple effect in either direction.
In-person registration starting to affect Illinois handle?
While Illinois sports betting operators had an excellent June by revenue ($48.2 million), handle dipped to $476.5 million. That was the lowest figure since November 2020.
Pritzker ended online registration in April. So, in June, Illinois was a few months into not being able to add remote customers. The policy finally might be catching up to the Land of Lincoln.
Thus, the state has an incentive to return to online registration. If nobody bids for the $20 million online-only licenses, one would have to think lowering the price tag is on the table.
Of course, that would take time. And it would come at the expense of Illinois sports bettors.
