Tekkorp No Longer Pursuing Illinois Sportsbook, Process May Be Reopened

Tekkorp Digital Acquisition Co. has declared its withdrawal from seeking an Illinois sportsbook license. The special purpose acquisition company has initiated the procedure to discontinue operations.

So far, the company is the only applicant that the Illinois Gaming Board has listed as a contender for one of three online-only sports betting licenses.

Tekkorp, which was launched in September 2020, has announced that it will cease operations on October 26. The decision comes following the company’s failed attempts to secure an Illinois sports betting license, despite raising nearly $300 million in its Initial Public Offering. Tekkorp had been in discussions to acquire Playtech, Caliente Interactive, and Caliplay. However, on late Tuesday, the company stated it will not seek an extension beyond the October 26 deadline to finalize a deal.

Tekkorp stated in a press release, “Return capital to the company’s respective shareholders as promptly as reasonably possible, but no later than ten business days.”

Tekkorp stated that it assessed over 50 potential companies, concentrating on high-quality opportunities that were fairly valued.

Due to consistently high valuation expectations, a volatile market, and a diminishing IPO market, the company couldn’t find an opportunity that it believes would provide a substantial return on investment for its shareholders.

Where Illinois stands on sportsbook expansion

Nine live sportsbook operators are based in Illinois.

At present, seven out of the nine operators in Illinois have legal online sportsbooks. They include:

• BetMGM
• DraftKings
• BetRivers
• Caesars
• FanDuel
• PointsBet
• Barstool

An additional five applicants are currently undergoing the licensing process to provide online sports betting services in Illinois.

• Tied to Hard Rock Rockford – Hard Rock.
• American Place in Waukegan — Circa Sports.
• Unibet vs Argosy Casino Alton.
• Either Bally’s Rock Island or a prospective Bally’s casino in Chicago.
• WynnBET has not disclosed any tethered casino.

Online-only sportsbooks licensing process may be reopened

An online-only sportsbook license not connected to a retail casino costs $20 million. This is twice as much as the maximum cost for a sportsbook license that is linked to a land-based casino.

Last December, four companies submitted applications to the IGB for one of the three available online-only licenses.

Tekkorp had advanced the furthest in the process before choosing to withdraw. Betway had applied for a license but later retracted its application. Fubo Sportsbook’s license application was denied. Another company, which remains unnamed, has also dropped out of the race.

The competitive application process might be reopened, Joe Miller, a spokesperson for the IGB, informed the Chicago Tribune.

Illinois sports betting is big business

Since their inception in March 2020, IL sportsbooks have exceeded $1 billion in gross gaming revenue.

When the IGB releases the numbers for August, Illinois is anticipated to exceed a revenue of $1 billion in 2022 alone.

Through July, Illinois holds the second position nationally in sports betting year-to-date, with revenues exceeding $388 million. Only New York has higher revenues, surpassing $682 million.

In 2022, Illinois ranks third in sports betting handle with over $5.2 billion wagered, falling behind New York with over $9.3 billion and New Jersey with over $6.3 billion.

The growth has been driven by online sportsbooks. Since the legalization of sports betting in 2020, they have been responsible for 96% of the total wagering volume.

This all occurred in a state that broke its own record by generating almost $1.9 billion in total gambling revenue for the fiscal year 2022, which concluded on June 30. This represents an increase of approximately $500 million from its previous highest fiscal year (2019) and a nearly 39% rise from 2021.