shuttered since late March.
On top of that, no sportsbooks have begun to offer mobile sports betting, and when they do, consumers will be required to in person to open an online sports betting . That requirement will stay in place until the first stand-alone mobile sportsbook platform launches, and it appears that may not happen until 2022.
Although sports betting options are currently limited, two events have captivated sports-starved American bettors over the past month — Colorado, where mobile sports betting is permitted, licensed sportsbooks surfed scarce waves in the ocean.
18-month mobile delay was a compromise 4e6n15
The new Illinois law includes a section nicknamed the “penalty box,” which is an 18-month waiting period for mobile-only operators to go live. There will be three available, eventually, at a price tag of $20 million apiece.
In the text of the law, it is referred to as a “regulatory waiting period.” The idea behind the year-and-a-half delay was to give local casino operators a head start over online-based operators, though it was directed mainly at daily fantasy sports companies FanDuel, both of which operate DFS contests in Illinois.
According to a 2015 Illinois attorney general’s opinion, both companies operated illegally in the state before and after the opinion was issued. Other potential sportsbook operators in Illinois didn’t want DraftKings and FanDuel to have the ability to leverage their DFS databases and get a jump on local operators in the mobile market. Thus, the penalty box was born out of punitive compromise.
But in the industry, there has been some question about when, exactly, mobile-only platforms may go live. And in the current climate, that question has become more pressing, given the in-person registration requirement.
The law 6y160
According to the text of the new law, the Illinois Gaming Board (IGB) has up to 540 days to accept mobile-only applications after the first “Owners” sports betting license is issued in the state. An Owners license will allow a retail casino to offer in-person and mobile wagering. On top of that 540 days, the IGB does not have to announce which operators get those licenses for another 90 days. In total, it could be up to 21 months between when the first license is issued in the state and a mobile-only platform gets a green light to go live.
As yet, no Owners licenses have been issued. The casinos that opened physical sportsbook lounges in Illinois in early March — Rivers Casino and Argosy Casino Alton — did so with temporary operating permits. Those permits were issued on Jan. 31 and are valid indefinitely. So far, seven of 10 casinos and all three of the state’s horse racetracks have applied for Owners or Organizational Licenses.
The next Illinois Gaming Board meeting is set for June 11. Any applicant that has received a temporary operating permit could be licensed upon determination by the Illinois Gaming Board at any board meeting, according to IGB spokesman Joe Miller. That would mean that it’s possible that the Rivers and Arogosy casinos could get their permanent licenses at the June meeting.
“The March and April Board meetings were postponed due to COVID-19, so the earliest a temporary operating permit holder could be licensed is the June 11, 2020 Board meeting,” said Miller.
There was no scheduled meeting in May.
Clock on stand-alone mobile start June 11 5c1m72
Using June 11 as the start time for the clock to mobile-only sports betting, which will begin the sunset on the in-person registration requirement, the IGB would have until Dec. 21, 2021, to accept mobile-only permits, and until March 11, 2022, to announce which operators were awarded mobile-only licenses. At that point — as with retail or tethered mobile sportsbooks — operators would be able to go live once testing is complete and the IGB gives its go-ahead.
As of now, the application for a mobile-only license, listed under the header “Online Sports Wagering Operator” on the IGB site, is not available.
Illinois politicians failed Econ 101. Would love for my home state to legalize sports betting, but the current proposed bill is an exercise in buffoonery.
Why?
-540-day blackout period for online
-20% tax rate
-Exorbitant license fees ($25 million for online?!)In summary … pic.twitter.com/3OGmr9M0uy
— Brad Evans (@NoisyHuevos) May 24, 2019
Several operators have privately balked at the $20 million fee for a mobile-only license. FanDuel is trying to forge a workaround to partner with a local horse racetrack and have its mobile component tethered to a retail space, which will cost less (the license fee is $10 million) and would allow FanDuel to get to market quicker.
Separate from the timeline, which in reality looks like it will take nearly two years to play out, Illinois gaming has found itself one of the many victims of the COVID-19 crisis. The state, which was counting on new tax revenue from sports betting, isn’t going to get what it had hoped for, and without remote registration, it’s unlikely that tax revenue will be anywhere near projections.
At least one source says the in-person registration requirement could come up for discussion in the state legislature later this year. Though the General Assembly has adjourned, it will reconvene for the so-called “veto session” around Thanksgiving, and there’s a possibility of a special session before that. It is the state legislature, not the IGB, that would have the power to alter or remove the in-person registration requirement.
To be clear, it could be FOREVER. An operator will need to pay a $20 million fee, meet the other requirements necessary to apply for the license, receive regulatory approval, and invest tens of millions of dollars in marketing
— Jeremy Kudon (@JKudon) May 12, 2020
