The state of Illinois recently launched its legal sports betting industry, but there were some pretty strict restrictions in place. With only a select amount of betting licenses available to racetracks and casinos, the competition was high.
Companies like FanDuel and DraftKings were expected to be shut out of the process, but it appears that FanDuel has found a way to get around these restrictions.
Multiple sources have confirmed that FanDuel is looking into buying Fairmount Park Racetrack in Collinsville, Ill. Fairmount Park Racetrack has already applied for a $10 million organization license, and FanDuel would be able to open up sports betting on the property.
FanDuel has also applied for a management services provider license that comes with a cost of $1 million. It is unclear when or if this purchase will go through, especially with all of the coronavirus news dominating headlines and putting the Illinois sports betting industry on hold for the time being.
Another major reason that FanDuel has decided to try and buy Fairmount Park Racetrack is that the price tag of applying for a mobile sports betting license is $20 million. That price is much higher than the company has been paying in other states, where they have already launched sportsbooks.
FanDuel, and their rival DraftKings, are also not allowed to apply for a license for at least 18 months after being put in the “penalty box” by the state of Illinois.
Why The Restrictions
The reason that DraftKings and FanDuel were put into the penalty box dates all the way back to a major argument that was had in 2015. The Illinois Attorney General determined that Daily Fantasy Sports were illegal in the state and that those two companies needed to stop taking customers from the state.
Both companies continued to operate, which created a massive lawsuit to take place. Under this new sports betting law, Illinois lawmakers put those companies in the penalty box, and won’t let them operate an online sportsbook for 18 months.
FanDuel already has a presence in the state of Illinois through its sports betting operating partner, Boyd Gaming. Boyd Gaming has several locations throughout the state, and FanDuel could have been the sportsbook operator at these locations if their application was approved.
By purchasing the Fairmount Park Racetrack, FanDuel will be able to open and operate a sportsbook under their name.
Thoroughbred flat racing is what is currently offered at Fairmount Park Racetrack. Fairmount also owns four off-track betting facilities throughout the state of Illinois, and it is unclear if they will be included in this deal.
It’s also unclear if FanDuel is planning on keeping the racetrack open or just creating a retail sportsbook on the premises.
FanDuel currently offers sports betting in seven states across the country, including Indiana, Iowa, and Michigan in the Midwest. The main draw in Illinois is the city of Chicago, and this could give FanDuel a chance to get a foothold into that market.
Illinois will be implementing a 15% tax on gross gaming and betting revenue, which is much higher than in other states in the US.