Does Anyone Have $20 Million? Online-Only Sports Betting License Applications Now Available In Illinois

The Illinois Gaming Board (IGB) has announced the availability of three online-only sports betting licenses. Each license costs $20 million, and all applications must be submitted by December 3rd.

Once the IGB issues a license exclusively for mobile platforms, in-person registration will no longer be required. The IGB is required to announce the presence or absence of eligible bidders in the event of any applications. This announcement is anticipated to be made around December 3rd.

The IGB must announce the successful bidders within 90 days. Following this, the agency will conduct separate investigations before issuing licenses. If all goes as planned, in-person registration is expected to end by the first half of 2022.

Yet, it is unlikely that any operator will be willing to invest the required $20 million to obtain a mobile license.

Zalewski doesn’t anticipate people bidding for a mobile-only license.

During an interview with Play Illinois in June, Illinois House Representative Michael J. Zalewski raised concerns about the $20 million fee for an online-only license, questioning whether any operators would be willing to pay it. He suggested that this high fee could potentially delay the reintroduction of online registration in the state and noted that he frequently receives requests from operators asking for the fee to be reduced by the Illinois Legislature.

The maximum amount for a standard sports betting license in the state is set at $10 million. This significant limit has had a noticeable impact on potential bidders, diverging from the expectations of legislators when they drafted the Sports Wagering Act.

The mobile-only licenses were originally meant to entice DraftKings and FanDuel to enter the Illinois market, but the companies found ways to work around the restrictions by partnering with a casino and a racetrack.

The suspension of in-person registration due to the COVID-19 pandemic in Illinois resulted in a surge of business for DraftKings and FanDuel for over seven months. If these companies do not bid for the mobile-only licenses, then who will?

Additionally, by spending $20 million on a license, bidders are providing significant support to companies such as DraftKings, FanDuel, Barstool, etc. This may not be seen as an attractive idea for some.

Illinois is currently ranked second or third in the US for monthly sports betting revenue, making the $20 million price tag potentially justifiable to some.

In the upcoming months, the biggest focus in Illinois sports betting will be on whether or not there will be any bids for the license. The consequences of this decision will have a major impact on the industry.

Illinois handle beginning to be impacted by in-person membership?

In June, sports betting operators in Illinois generated an impressive revenue of $48.2 million, but the handle dropped to $476.5 million, the lowest it has been since November 2020.

Pritzker’s website membership was discontinued in April, leading to Illinois being on the verge of including rural clients in June. The plan is quickly gaining popularity in the Land of Lincoln.

As a result, the current circumstances are leading to a shift back to electronic registration. It is possible that the price of the online licenses, initially set at $20 million, may be lowered if there are no bidders.

Certainly, this could take some time and may also incur expenses for Illinois sports bettors.