DraftKings has embarked on an unconventional method of promoting attention to its sports betting offerings in Illinois, reaching an agreement with Accel Entertainment on Wednesday to advertise on video gaming terminals.
The online betting titan also launched in Illinois via a non-traditional route, entering a market share agreement with Casino Queen in East St. Louis. That was a workaround of the “penalty box” provision of the gaming expansion bill Gov. JB Pritzker signed into law in June 2019 that would have required DraftKings to wait 18 months after the first retail sports betting license was issued to apply for an online-only one.
DraftKings launched retail and mobile sports betting at Casino Queen on Aug. 5, rebranding the casino, and bettors in the Prairie State can sign up via remote registration for a mobile sports wagering account through Sept. 18. Last month, Pritzker restored Executive Order 2020-41 — which suspended the in-person registration provision of the gaming bill — after initially signing it in June and letting it lapse in late July.
DraftKings is currently one of three mobile sports betting operators in Illinois along with BetRivers and FanDuel, and one of six retail operators. Both groups are expected to gain new entrants in the short-term future as PointsBet via Hawthorne Race Course and Par-A-Dice Casino in Peoria — which has FanDuel as a mobile skin — are expected to soon join the fray.
Attracting attention in bars and high-traffic areas
The agreement will give DraftKings on-screen advertising space on terminals spanning more than 2,300 places in Illinois where Accel has a total of 11,108 video game terminals (VGTs) as of June 30. That is nearly one-third of the state’s total locations where at least one VGT is operating — the most recent Illinois Gaming Board revenue report in July listed an “establishment count” of 7,137 such places and 35,680 terminals.
“DraftKings is excited to be working with Accel as we continue to reach more sports betters across the state of Illinois,” said Ezra Kucharz, chief business officer, DraftKings, in a joint statement. “This collaboration is a natural fit for us as Accel is a trusted brand who will provide on-the-ground support to complement our efforts in Illinois and beyond. We look forward to providing customers with more ways to engage with our exceptional content through Accel’s digital display screens.”
The in-location digital display screens will have advertisements designed to promote DraftKings, with a focus on brand retention for sports betting among its player base. Accel Chief Commercial Operator Michael Marino noted the agreement felt like a natural fit from the gaming operator’s perspective given its users’ interactions with its own free-to-play sports betting app.
“We have two strategic objectives to strengthen our business: differentiate our offering for establishment owners and deepen our player relationships,” Marino said. “Joining with DraftKings is a strong first step towards accomplishing both goals. Sports betting is a social activity and bringing the leading DraftKings brand to our highly frequented local businesses will help those establishments win. Our players have also shown us their interest in sports betting through our free-to-play sports app AE.bet and with this relationship we are able to deliver them access to a best-in-class real money sports betting experience.”
New advertising avenue but still lacking Chicago presence
Drawing attention to have bettors sign up via remote registration for mobile sports betting is crucial for all operators in Illinois given its size as the sixth-largest state in the country in terms of population, but perhaps more so for DraftKings than any other entity.
The location of Casino Queen in the southwestern part of Illinois is a drive of nearly five hours from Chicago, the third-largest city in the United States. That has the potential to make television ad buys in that market cost prohibitive, especially when Rivers Casino, which operates BetRivers, is located near Chicago in Des Plaines. Additionally, East St. Louis is part of a state-drawn region currently dealing with enhanced COVID-19 mitigation measures. Casino Queen currently has limited operating hours and its operating capacity is 25%.
The gaming expansion bill Pritzker signed into law last year also increased the maximum number of VGTs permitted at an establishment from five to six — though large truck stops can have as many as 10 — but there are none in the city of Chicago due to a city ordinance.
Even with the absence of VGTs in Chicago, the machines generate a notable amount of attention, and by extension, tax revenue. After the IGB had shut down the terminals from March 16-June 30 to help combat the spread of COVID-19, the regulatory agency authorized their reactivation starting July 1.
Patrons flocked to the machines throughout July, playing more than $2 billion worth of games that resulted in a net terminal income of more than $166 million. The 34% tax rate on video game terminals generated taxes totaling $56.4 million, of which $48.1 million went directly to state coffers.