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DraftKings escapes Illinois sports betting ‘penalty box’ with mobile launch

They’re out of Illinois’ “penalty box” for now, but the bad sports betting blood remains.

Thanks to Gov. J.B. Pritzker’s latest coronavirus disaster proclamation, online sportsbook giant DraftKings maneuvered its way around a hurdle in state gambling law to enter the rookie Illinois sports betting market last weekend — and the CEO of the company didn’t hold back in his assessment of the casino interests that fought to keep them locked out.

“Feels so good to be taking mobile registrations in Illinois,” DraftKings co-founder Jason Robins said in a since-deleted Monday tweet. “Especially after the corrupt idiots at Rush Street Gaming tried to block us in the state. Over the long run, good policy always wins.”

A spokesman for Rush Street — billionaire Rivers casino chairman Neil Bluhm’s gaming company — fired back by noting “Rush Street has never been asked to leave a state, pays taxes on every wager, and has not been named in multiple consumer class action suits,” referring to DraftKings’ past legal issues in some markets.

DraftKings CEO Jason Robins soon deleted this tweet.Screenshot

The war of wagering words shows there’s been no love lost between the online-only operators and their brick-and-mortar casino nemeses since Illinois’ gambling power players introduced legal sports betting to the state with the massive gambling expansion signed into law by Pritzker last summer.

Key to those Springfield negotiations was inclusion of the so-called “penalty box” period for online giants such as DraftKings and FanDuel, meaning they’re barred from applying for $20 million sports wagering licenses until 18 months months after the casinos nab their licenses at a fraction of the cost.

Rush Street lobbyists were among the gambling interests who insisted on that provision to give the casinos a head start in the Illinois sports betting market — and to punish the online companies that operated for years in the legal gray area of daily fantasy sports. Former Illinois Attorney General Lisa Madigan concluded in 2015 that the online wagering firms constituted an illegal gambling operation.

As a result, the Illinois law was written to allow casinos to offer mobile betting applications — by far the industry’s most profitable platform — but it requires gamblers to register for their accounts in-person at the casinos.

So DraftKings was on the sidelines when Rivers launched the state’s first retail sportsbook at the Des Plaines casino March 9, but as it’s done for most facets of life, the pandemic changed the game just a few days later.

Rivers Casino chairman Neil Bluhm.Ashlee Rezin Garcia/Sun-Times

With the casinos shut down due to COVID-19, Pritzker issued an executive order suspending the in-person sports betting registration requirement, which allowed Rivers to launch its mobile platform June 18.

Meanwhile, DraftKings had negotiated its path out of the penalty box by striking a co-branding agreement with the Casino Queen in downstate East St. Louis.

And just as they were poised to take advantage of Pritzker’s executive order, Illinois casinos reopened with the Phase 4 and the Democratic governor let the in-person suspension itself expire in his updated July 24 disaster proclamation — meaning gamblers would have to drive to the Casino Queen to open a DraftKings account.

But as the virus has rebounded statewide, Pritzker suspended the registration rule again in his latest proclamation, which went into effect Aug. 21.

“As the state imposes stricter mitigations to combat the spread of COVID-19, the administration has reinstituted online sports betting through the Governor’s emergency powers,” Pritzker spokeswoman Jordan Abudayyeh said in an email. “Increased mitigation measures are impacting the capacity limits and hours of operation at casinos in regions seeing higher rates of the virus and online sports betting will allow for an even playing field across the industry.”

That means bettors statewide can register for DraftKings on their phone until at least Sept. 19, when Pritzker’s latest proclamation expires.

In his Monday Twitter barb, Robins, the DraftKings CEO, applauded Pritzker “for doing what’s right for the citizens of Illinois.”

The company did not respond to a request for comment on his deleted remarks.

Their top online competitor FanDuel is poised to break out of the penalty box, too, as the betting website has a deal in place to launch through a partnership with the Par-A-Dice Casino in East Peoria, according to a report published by the sports betting website SportsHandle.com.

In all, seven Illinois casinos and one racetrack, Hawthorne Race Course in Stickney, have received Illinois Gaming Board approval to open sportsbooks.


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