Zalewski: $20 Million Mobile-Only Sports Betting License Will Be A Tough Sell

Posted By Joe Boozell on July 13, 2021

Illinois House Rep. Michael J. Zalewski told PlayIllinois that he doesn’t anticipate any operator forking over the $20 million for an online-only sports wagering license.

So, if no gaming company bids on one of the three mobile licenses and there is no legislative fix, in-person sports betting registration will be here to stay. The issuance of an online-only license is the key to triggering remote sportsbook registration in Illinois.

Applications for these online-only licenses should become available in December.

But Zalewski said he does not believe anyone will bid on those licenses due to the hefty price tag. A typical sports wagering license in Illinois may not exceed $10 million, so the price gap is significant.

That could create a scenario where there is no end in sight for in-person registration.

Though Zalewski, for what it’s worth, is hopeful that the Sports Wagering Act can be tweaked to either lower the price of the online-only licenses, or make it so that the online-only licenses aren’t the trigger for remote registration.

The original intent of the law, he said, was for in-person registration to expire after 18 months. Of course, the law has not played out as intended. The online-only licenses were meant to entice the likes of DraftKings and FanDuel to Illinois.

Instead, those companies bypassed the “penalty box” by linking up with casinos and racetracks. Now, they are the Illinois market leaders.

Because of the lawmakers’ original intent, one would think a quick legislative fix would be fairly easy.

Though if you’re familiar with Illinois lawmaking, that might be wishful thinking.

Illinois sports betting in-person registration background

Illinois Gov. JB Pritzker signed the Sports Wagering Act into law in June 2019. It included in-person registration for the first 18 months after the first license, and then online-only licenses would become available.

Once the Illinois Gaming Board (IGB) issues the first mobile-only license, online registration would be available for everyone.

However, the COVID-19 pandemic significantly impacted the Illinois sports betting landscape. The pandemic caused Pritzker to suspend in-person registration for seven-plus months, paving the way for remote sign-ups.

Illinoisans certainly took advantage. In April and May, the Land of Lincoln was the No. 2 sports betting market in the US by handle.

That’s despite Pritzker bringing back in-person registration in early April. In March, Illinoisans bet $633.6 million on sports, the high-water mark for the state.

Not only is the $20 million price tag high, but the online-only licenses likely aren’t as attractive to potential operators as they once may have been.

The market is already robust, and DraftKings and FanDuel obviously won’t be bidding on the licenses. A prospective operator would be paying $20 million to join a (fairly) established market while helping those more established operators in the process.

If company X goes for the mobile-only license, they may be helping themselves, but they are arguably helping sportsbooks like DraftKings, FanDuel and Barstool even more.

For all of those reasons, it makes sense that mobile-only licenses are a tough sell.

BetMGM, Unibet, theScore Bet, Golden Nugget and Bally’s have all taken steps to enter the IL sports betting market. Though for now, the timelines for those incoming sportsbooks are up in the air.

What about in-state college betting in Illinois?

Zalewski is optimistic about the removal of the in-state college betting ban this year.

“I think it gets done,” Zalewski said when asked about betting on Illinois college teams.

In the last legislative session, the House passed a bill that would legalize in-person betting on Illinois collegiate teams. Zalewski confirmed that it could serve as an incremental policy step toward online IL collegiate wagering.

The Senate has yet to vote on the bill, which is expected to happen in October. The bill passed with ease in the House.

Sources also say that Illinois Athletic Director Josh Whitman, who’s been the most vocal opponent of legal in-state college betting, even softened his stance due to the in-person compromise.

At a public House Executive Committee hearing in April, Whitman defended his position:

“Most of the time, they (student-athletes) base a lot of their self-concept or self-image about people they’ve never met, what they say about them on social media. And that’s a daily battle that we fight in college-athletics today. By allowing people in our state to bet on our own student athletes, we’re only opening the door and inviting people to have those intense, threatening, abusive interactions with our student-athletes.”

It’s going to be an eventful Q4 in the Illinois sports betting industry.

Photo by Seth Perlman / AP
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Joe Boozell

Joe Boozell has also been a college sports writer for NCAA.com since 2015. His work has also appeared in Bleacher Report, FoxSports.com and NBA.com. Growing up, Boozell squared off against both Anthony Davis and Frank Kaminsky in the Chicagoland basketball scene ... you can imagine how that went.

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