Tekkorp Digital Acquisition Co. has announced it is no longer pursuing an Illinois sportsbook license. The special purpose acquisition company has begun the process of ceasing operations.
The company was the only applicant, so far, that the Illinois Gaming Board still had listed as being in the running for one of three online-only sports betting licenses.
Tekkorp launched in September 2020. The company had raised almost $300 million in its Initial Public Offering in an effort to secure an Illinois sports betting license. It had been in talks to acquire Playtech, Caliente Interactive and Caliplay. But late Tuesday, Tekkcorp announced it would no longer pursue an extension of the deadline to complete a deal by an Oct. 26 deadline. The company will be dissolved effective on that date.
“And as promptly as reasonably possible, but not more than ten business days thereafter, return capital to the Company’s respective shareholders,” Tekkorp said in a press release.
Tekkorp said it evaluated more than 50 target companies, focusing on high quality opportunities at fair valuations.
“As a result of persistently high valuation expectations combined with an increasingly volatile market and declining IPO market, the Company was unable to secure an opportunity that it believes would offer a compelling return on investment for its shareholders.”
Where Illinois stands on sportsbook expansion
Illinois is home to nine live sportsbook operators.
Currently, seven of the nine operators have legal online sportsbooks in Illinois. They are:
A further five applicants are going through the licensing process to be able to offer online sports wagering in Illinois:
- Hard Rock — tethered to the Hard Rock Rockford.
- Circa Sports — American Place in Waukegan.
- Unibet – Argosy Casino Alton.
- Bally’s — either Rock Island or a yet-to-be-built Bally’s casino in Chicago.
- WynnBET — no tethered casino has been disclosed.
Online-only sportsbooks licensing process may be reopened
The cost for an online-only sportsbook license not tethered to a retail casinos is $20 million. That’s double the maximum for a sportsbook license tethered to a land-based casino.
Four companies applied to the IGB last December for one of three online-only licenses.
Tekkorp had gotten farthest in the process before deciding to fold. Betway had filed for a license, but later withdrew its application. Fubo Sportsbook had its license application rejected. Another unnamed company is no longer in the running.
Joe Miller, a spokesperson for the IGB told the Chicago Tribune that it may reopen the competitive application process.
Illinois sports betting is big business
Since launching in March 2020, IL sportsbooks have surpassed $1 billion in gross gaming revenue.
And Illinois is expected to surpass revenue of $1 billion in 2022 alone when the IGB releases numbers for August.
Year-to-date numbers through July shows Illinois sports betting ranks solidly in second place in the nation with revenue of more than $388 million. Only New York is higher with revenue of more than $682 million.
Illinois is third in sports betting handle in 2022 with over $5.2 billion bet. That falls behind New York (over $9.3 billion) and New Jersey (over $6.3 billion).
Online sportsbooks have driven the growth. They account for 96% of the total wagering volume since sports betting was legalized in 2020.
All this in a state that set a record for total gambling revenue of nearly $1.9 billion for fiscal year 2022 which ended June 30. That’s up some $500 million from the previous best fiscal year (2019) and an increase of nearly 39% over 2021.