Opinion: In-Person Registration At DraftKings Reveals Mandate Was More About Punishment, Not Security

Written By Derek Helling on August 12, 2020 - Last Updated on August 16, 2020

Editor’s Note: The following article represents the views of the author. 

When is a face-to-face registration requirement for online sports betting not really a requirement? To answer that question, take a look at DraftKings‘ in-person registration model in operation in Illinois.

In actuality, it’s more of a location requirement than a face-to-face mandate. While that in and of itself isn’t an issue, it reveals the inclusion of the provision in the Illinois law was meant solely to punish online daily fantasy sports operators.

Unique aspects of DraftKings in-person registration in Illinois

Unlike in other states, like Iowa (for now) and Nevada, bettors in Illinois don’t literally have to visit a retail betting window at DraftKings at Casino Queen in East St. Louis to register. Iowa’s in-person registration requirement expires on New Year’s Day.

In Nevada and Iowa, bettors who want to place wagers online can’t until they physically show up at a tethered retail sportsbook. For example, if you want to wager on the PointsBet online sportsbook in the Hawkeye State, you have to initially visit the retail sportsbook at Catfish Bend Casino in Burlington, IA.

There, a member of the sportsbook staff will inspect your state ID, which serves two purposes.

First, it helps the sportsbook make sure you aren’t on the state’s self-exclusion list.

Secondly, it verifies you are at least 21 years old and of legal betting age.

However, there isn’t any reason why that process has to be done face to face. Online sportsbooks can handle compliance with all laws governing bettor eligibility completely over the internet. Legal sports betting states, such as Pennsylvania and New Jersey, prove that it’s a smooth, effective process.

That’s what DraftKings Illinois is doing in East St. Louis exactly. However, to satisfy the state’s requirement, DraftKings only requires you to be on the property.

You can pull into the parking lot and register your account through the DraftKings mobile app or website on your smartphone. You’re free to register inside at the retail book’s window as well, but it’s not required.

DraftKings does so using geolocation technology called “PinPoint,” which is produced by a company called GeoComply. The technology uses the location service on your mobile device as well as Bluetooth beacons to create a “fence line” at the casino.

While there are definite upsides to this model for bettors, it’s telling for the state government. No one can argue anymore that the in-person mandate was about anything but revenge.

Real reason behind DraftKings in-person registration mandate

For would-be DraftKings customers in Illinois, this is making the best of an undesirable situation.

It’s still inconvenient for many Illinoisans to have to make the trip to East St. Louis just to tap on their phone screens a few times. However, this way, it’s a little less inconvenient.

Additionally, this helps slow the spread of COVID-19 by allowing registrants to remain in their cars. That not only protects bettors but the staff at the Casino Queen as well.

The drama of the situation requires Illinoisans to review some history.

In 2015, then-IL Attorney General Lisa Madigan issued an opinion that the kind of daily fantasy contests for cash prizes with paid entries that DraftKings and FanDuel offer online constitute illegal gambling.

Despite that announcement, DraftKings and FanDuel kept right on accepting entries and awarding prizes in Illinois. Madigan never pressed the issue, understandably. Pressing charges would have taken a massive amount of resources and there’s no guarantee a jury would have convicted anyone.

That doesn’t mean DraftKings got off without any consequences. The IL Legislature, led by IL Speaker of the House and Madigan’s father Michael Madigan, struck back last year.

IL law established a kind of “penalty box” for DraftKings.

The law mandates that bettors have to register their accounts “in-person” until the Illinois Gaming Board issues the first of three online-only sportsbook operator licenses.

The law further specified that the IGB can’t issue any of those licenses until 540 days after the first retail sportsbook in the state accepts its first wager. The clock is currently ticking on that, as Rivers Casino was the first to take wagers on March 9.

What does this mean for Illinois sports bettors, DraftKings?

While DraftKings has still launched ahead of the 540-day “penalty box” period, it did so at a price. It has to share its IL revenue with its facility partner and the location requirement limits its growth potential.

The St. Louis metro is a good population center as far as Illinois goes, but it’s not the strongest section of the market. To get people from Chicago to wager, DraftKings IL Sportsbook must convince them it’s worth making an eight-hour round trip.

There is another option for legal betting with a registration avenue closer to Chicago, namely: the BetRivers online sportsbook. The PointsBet and William Hill retail sportsbooks will also be in the greater Chicago area when those sportsbooks go live online.

This registration model delivers little value to the casino.

Because registrants can complete the process without stepping foot inside the facility, the casino won’t see those customers make cash deposits or gamble in other ways while they’re on-site.

If compliance with the state’s self-exclusion program or minimum age requirements were the reason behind the “in-person” mandate, then IL wouldn’t merely allow bettors to register on their devices in the DraftKings at Casino Queen parking lot. Instead, they would mandate bettors physically present themselves.

Bettors in IL are the losers in this situation

Those unnecessary concerns weren’t the priority behind this part of IL law, however. This part of the law was all about penalizing DraftKings for ignoring the state’s attorney general for the better part of four years.

No one should feel bad for DraftKings. The company made its choice and has to live with the consequences. In reality, however, new sports bettors in Illinois pay the price in this situation.

They face the burden of making an unnecessary trip to a parking lot in East St. Louis, perhaps driving hours each way, to spend a mere few minutes on-site. While they’re there, they go through a set of actions they could just as easily perform with the same amount of compliance and security literally anywhere else in the state.

While DraftKings’ in-person registration requirement will end sometime in the next two years, it’s a significant disadvantage for legal online sportsbooks in Illinois now. Additionally, it does nothing to improve the customer experience.

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Derek Helling

Derek Helling is a lead writer for PlayUSA and the manager of BetHer. He is a 2013 graduate of the University of Iowa and covers the intersections of sports with business and the law.

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