Illinois apparently is struggling to find suitable takers for its three $20 million online-only sports betting licenses.
The Illinois Gaming Board (IGB) announced Thursday that only one operator had been approved for an IL sports betting license from four bidders.
What happened to Illinois sports betting license bidders?
The one qualified applicant comes from outside the US. Mexican gaming giant Caliente was deemed suitable and its application advanced.
Three others failed to clear the bar:
- Fubo Gaming did not meet the minimum qualifications for licensure.
- One mystery applicant was 14 minutes late submitting its bid and not considered.
- Another mystery bidder pulled its application in February.
The remaining two online-only licenses can still be awarded in a supplemental bidding process. However, no timeline was specified for that.
Why do online licenses exist anyway?
The mobile-only licenses became available 18 months after the IL market went live. That delay appeared originally meant as a kind of penalty box for DraftKings and FanDuel.
Local casino operator Rush Street Gaming lobbied lawmakers strongly to keep “bad actors” out of Illinois because of their daily fantasy sports operations. DFS created an unfair advantage for the two to create a database of potential sports betting customers, Rush Street argued.
That penalty box turned out to be futile however, with FanDuel and DraftKings partnering with local casinos to get their licenses regardless.
Who is Caliente?
Caliente is Mexico’s largest sportsbook. The company’s online business, Caliente Interactive, is run as a joint venture with UK-listed provider Playtech.
Caliente will undergo a license eligibility review in the coming months before it receives its full IL license.
Is Caliente close to US listing?
Caliente Interactive also appears to have the backing of Tekkorp, a Nasdaq-listed SPAC that has not yet announced an acquisition target.
Tekkorp was actually listed on the IL license application, with Caliente named as its DBA (Doing Business As.)
Sky News reported in December last year that Tekkorp was in talks to take Caliente Interactive public. However no deal has been announced yet.
More on Caliente
Illinois is a key state for Caliente given its Latino and Hispanic population; the sixth-largest in the US.
Caliente has also been exploring licensing in other states, including New Jersey and Colorado, LSR understands. The company could take the open Resorts license slot in NJ, if approved by regulators.
What about Fubo bid for Illinois sports betting?
As for Fubo, the company said a key person associated with its bid was found ineligible for licensure. However the operator questioned that decision, saying in a statement:
“The disqualification was based on a portion of a statute unique to the competitive bidding process and the specific license available in connection with the process. Fubo Gaming has received operating licenses by gaming regulators in other states, each following extensive background investigations into the company and its principals. The basis for which the company has now been disqualified in Illinois did not preclude its licensure by these other states.
“Fubo Gaming respectfully disagrees with the decision of the Illinois Gaming Board and believes the company meets the standards to continue through the competitive selection process. Fubo Gaming is currently evaluating its options following the decision today.”
The Fubo Sportsbook is live in Arizona and Iowa.
Big deal for Illinois sports betting?
As for Illinois, it is unclear how much Caliente can grow the overall market.
Seven sportsbook apps are currently live in the state, tethered to retail casinos.
Those books took nearly $300 million in handle on March Madness alone.