Days before DraftKings Sportsbook was allegedly set to start accepting online wagers in Illinois, Gov. JB Pritzker ended the temporary suspension of the in-person registration requirement.
While the reversal follows Rivers Casino in Des Plaines reopening, along with other brick-and-mortar gaming facilities, its timing is interesting.
What’s up with the return of in-person registration mandate?
As of 12:01 a.m., all Illinois bettors who haven’t registered at an online sportsbook will have to visit a corresponding casino, off-track betting site or racetrack within the state to complete their account registrations again.
Pritzker suspended that requirement in early June. At that time, all the state’s casinos were closed because of the COVID-19 pandemic. Meanwhile, Rivers and other casinos weren’t collecting any revenue.
Pritzker’s move changed that for Rivers Casino. Within days, BetRivers, the online sportsbook — operated by the same parent company as the casino— began taking wagers.
Since then, BetRivers has been the only option for Illinoisans for legal online sports betting. That was set to change, however. DraftKings was on the verge of becoming a threat to BetRivers IL.
DraftKings’ aggressive play to get into Illinois
July has been an active month for DraftKings in the Prairie State.
Early in the month, the operator announced a market-access deal with the Casino Queen in East St. Louis. Just over a week ago, the IL Gaming Board approved DraftKings’ management services provider permit.
Then last week, DraftKings announced its branding would become central to the East St. Louis property, incorporating its name into the casino’s title. That was crucial because the state’s emergency sports betting regulations require the facility name to be primary in the branding of online sportsbooks.
When the week ended, it looked like DraftKings was working at a rapid pace toward going live online in Illinois. As a matter of fact, the sportsbook was already touting a $100 bonus bet for people in IL who created new accounts.
It seemed all DraftKings was waiting on was the Illinois Gaming Board (IGB) to award Casino Queen its master license.
Since Pritzker lifted the suspension on Sunday, things are far less certain for DraftKings.
Back to square one for DraftKings
All of DraftKings’ work is not lost. It can still offer online and retail sports wagering if and when the IGB issues the master license to Casino Queen.
Now, however, any new DraftKings customer who wants to place bets on the DraftKings app or website will have to drive to East St. Louis and visit the casino first.
Therefore, DraftKings has to make a decision. Does it withhold spending on marketing until the in-person registration requirement expires? It ends when the IGB issues the first of three online-only licenses, which it can do 540 days after March 9, 2020.
What makes this situation more intriguing are the personal and political connections between Pritzker, Rivers, and DraftKings’ decision to ignore a warning five years ago.
Pritzker’s ties to Rivers and how it benefits the casino
Pritzker’s connections to Rivers are no secret.
Neil Bluhm is the CEO of Rush Street Gaming, which operates Rivers. In 2018, Bluhm’s daughter and ex-wife donated a total of $110,000 to Pritzker’s election campaign.
The entry of DraftKings into IL would have presented BetRivers with some serious competition. DraftKings’ status as a dominant player in the sports betting industry is well-known, especially because of its ability to operate at a loss to gain market share.
Reinstituting the in-person registration requirement throws a wrench into DraftKings’ plans. Furthermore, it ensures that BetRivers is the only legal online sportsbook in Illinois. It also guarantees that BetRivers is the only brand to benefit from the temporary suspension.
Yet, for all the damage this move does to DraftKings’ immediate ambitions, there’s a caveat. DraftKings “made its bed” in 2015, and now it seems Pritzker is making it lie there.
DraftKings previously ignored AG DFS opinion
In 2015, then-IL Attorney General Lisa Madigan issued an opinion that should have affected DraftKings. DraftKings chose to ignore it, however.
Madigan stated that in her interpretation of the law, DraftKings’ brand of daily fantasy contests constituted illegal gambling. Despite the issuance of the opinion, DraftKings kept accepting paid entries in IL.
That decision definitely played into Illinois’ latest gambling expansion. The agenda behind the in-person registration mandate and the waiting period for online-only licensure was to punish DraftKings.
With its latest activity, it looked like DraftKings would essentially avoid that “penalty box.” The reality is that Pritzker’s move is something the company should have seen coming.
Not only did DraftKings ignore the opinion of the top law enforcement officer in IL by continuing to take DFS entries, but it made a powerful enemy five years ago. Madigan is the daughter of IL Speaker of the House Mike Madigan.
Pritzker’s support of the elder Madigan is easy to identify as well.
Shortly after assuming office, Pritzker donated over $7 million out of his personal funds to Madigan’s reelection campaign.
That donation may have helped grease the wheels for the gambling expansion law. In turn, it may have also sealed DraftKings’ fate.
Pritzker’s decision comes at a logical time, as casinos in IL are open again. At the same time, the move to reinstitute the in-person mandate is about more than just whether Rivers has personnel on hand to inspect drivers’ licenses.