DraftKings Sportsbook and FanDuel Sportsbook are not taking a proposed bad-actor clause in Illinois sports betting legislation lying down.
The sports betting and daily fantasy sports giants will launch a $1 million ad campaign targeted at Rivers Des Plaines Casino and owner Neil Bluhm of Rush Street Gaming. Churchill Downs Incorporated and Rush Street jointly own the property following a $407 million transaction closed in March.
The multi-channel advertising push claims Rivers wants to exclude DraftKings Sportsbook and FanDuel Sportsbook from IL sports betting to benefit its property. FanDuel already threatened a lawsuit challenging any bad-actor language targeted at the company.
Why the bad actor debate?
The so-called bad-actor clause being debated in the Illinois legislature would restrict DraftKings Sportsbook and FanDuel Sportsbook from participating in legal sports betting for up to three years.
The proposal pushed by Rivers ostensibly would penalize the companies for allegedly operating outside state law in the DFS space earlier in the decade.
Less than 10 days remain in Illinois’ 2019 legislative session. Rep. Mike Zalewski continues his work to legalize IL sports betting but his final proposal remains a long shot to pass at this late hour.
What exactly is in these ads?
According to information from a Chicago public affairs firm representing the companies, DraftKings Sportsbook and FanDuel Sportsbook will air five days of “advocacy” advertisements in the Illinois sports betting battle:
… advocacy advertisements will air on radio broadcast and cable, state- and city-wide, including morning and evening news, late-night talk shows and live sporting events. There will also be a multichannel digital engagement campaign across social media, search, YouTube and over-the-top streaming providers, including Hulu, Roku and radio providers like Spotify and Pandora.”
The first ad, which frames Rivers as denying needed tax revenue to Illinois, can be seen here:
Rivers is located near O’Hare International Airport in the suburbs of Chicago. The company also operates sportsbooks at its casinos in Pennsylvania.
Rivers representative Paul Gaynor responded to the ads in a statement to Legal Sports Report:
“It’s not surprising that FanDuel and DraftKings are spending $1 million to try and buy a duopoly after years of engaging in conduct that the Attorney General concluded clearly constituted illegal gambling, without following regulations, paying taxes or paying licensing fees.
“Now they want to be rewarded for their improper behavior and put in front of the line ahead of gaming entities who complied with the law and regulations, paid taxes and put thousands of Illinois residents to work.
“While we support the legalization of sports betting, what we don’t support are companies that brazenly operate outside the rules, which is why a regulatory waiting period would ensure the integrity of sports betting and that they fully and readily comply with the same strict regulations already being followed by existing gaming operators.”
IL sports betting proposals all over the board
The first iteration of this year’s attempt at Illinois sports betting featured five varied proposals, including one including the bad-actor language targeted at DraftKings Sportsbook and FanDuel Sportsbook.
Each of those attempted to meet a request from Gov. J.B. Pritzker for more than $200 million in new revenue from 20 online sports betting licenses at $10 million each. Then came a revised set of two proposals this month with unusual elements including online license fees up to $20 million.
Zalewski quickly responded to criticism of those proposals with one last attempt at compromise. But even the optimistic representative admitted the bad-actor situation threatens to derail any Illinois sports betting bill this year.
“This issue consumes all the oxygen related to sports betting right now,” Zalewski said. “We know we need to make a decision on whether to include a penalty box or not. We still haven’t reached a consensus way to move forward on this.”
