DraftKings Enters Illinois, Bad Actor Clause Worked Around

DraftKings is entering the Illinois sports betting market, a SEC filing by the daily fantasy and sports book operator showed. Despite the provision in the law legalizing sports betting in the state against online-only sports book companies to stop them from entering the market for 18 months, the Boston-based operator found a work-around, through a partnership deal with Casino Queen in East St. Louis.

DraftKings Is Coming to Illinois Sooner

DraftKings who recently completed a merger with its technology provider SBTech and went public at Nasdaq, entered into a market-access deal with the Casino Queen, according to the terms of which the sports book will operate the casino’s mobile and retail betting, in exchange for an undisclosed percent of the net gaming revenue. Casino Queens in East St. Louis was one of seven casinos in Illinois that were granted master licenses by the Illinois Gaming Board.

“We look forward to working with both the Illinois Gaming Board and Casino Queen to bring our legal sports betting product to Illinois.”

DraftKings official statement

The bill legalizing sports betting in Illinois, SB60, was aimed at giving a head start for land-based operators, at the expense of the big boys DraftKings and FanDuel, and some reports emerged in May that both fantasy sports providers were actively exploring ways to  enter a market that presents huge potential. The Illinois sports betting market is expected to hit $1 billion annually when it reaches its maturity phase.

The bad actor clause was allegedly inserted targeting specifically DraftKings and FanDuel, seeking to punish both operators who were providing daily fantasy sports in the state for years, according to a ruling by former Illinois Attorney General Lisa Madigan in 2015, illegally.

Illinois Is Too Tempting to Wait 18 Months

Illinois officially launched sports betting in March but the market had not gained much traction as all US major leagues suspended action due to the starting health crisis. The state is 6th in population size, just a notch behind Pennsylvania, a state where sports betting was gaining huge momentum in the months before sports halted almost entirely. Unlike in Pennsylvania, though, competition in Illinois is weak, as there is only one mobile sports book app in the state, BetRivers.com launched by Rivers Casino Des Plaines, in partnership with Rush Street Interactive.

Obviously, there is a great incentive for the online sports book operator to hit the ground running in the state and launch its mobile app. Moreover, there is a great chance this happens during times with unprecedented amount of sports events, provided that the major leagues manage to resume action.

Expectations so far are that by August the NBA and the NHL will be in post-season play, while the MLB’s regular season will be in full swing, all this followed by the 2020 NFL season. College football and horse racing events such as the Kentucky Derby may also provide extra flair for DraftKings sports betting offering.

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