Betway, an international online sportsbook, has withdrawn its application for an online-only sports betting license in Illinois. This comes as a surprise given that Betway was a finalist in the Illinois Gaming Board’s (IGB) bidding process last April.
This is the second time that Betway has withdrawn its application for an online-only license in Illinois. The Illinois online sports betting market will remain with familiar operators, including ESPN BET, BetMGM, and FanDuel, as Betway has pulled out of the state.
The withdrawal also leaves all three available online-only licenses unclaimed. It also raises questions about whether the $20 million fee may be too high of a barrier to entry for prospective operators.
What we cover
Few Details on Reason for Betway’s Surprising Withdrawal
IGB Executive Director Brian Fruchter announced Betway’s withdrawal but provided few specifics on the operator’s rationale. It remains unclear if the IGB will pursue a second supplemental bidding process to try and award the remaining online-only licenses.
Illinois currently has eight sports betting operators after welcoming Circa Sports in late September. About three-quarters of the market share is dominated by two operators, FanDuel which has a license off the back of Fairmount Park Racetrack in Collinsville, and DraftKings, an online partner of Casino Queen East St. Louis.
The other major operators are BetMGM, a 50-50 joint venture between MGM Resorts International and Entain plc, Caesars Sportsbook, and BetRivers sponsored by Rivers Des Plaines. Fanatic Sports’ PointsBet and ESPN BET, which launched in November after PENN Entertainment sold back Barstool to David Portnoy, round out the active operator list.
However, the vast majority of the state’s $25.3 billion in lifetime handle has come from mobile and online channels, accounting for over 96% of total wagers.
Why Did Betway Pull Out?
There are a few reasons why Betway may have pulled out of Illinois. One possibility is that the company was not satisfied with the terms of the online-only license. The license requires operators to pay a $20 million upfront fee, which is significantly higher than the fee for a retail license.
Another possibility is that Betway does not believe that the Illinois online sports betting market is large enough to be profitable. The state’s online sports betting market is still in its early stages of development, and it is not clear how large it will eventually become. IGB recently called out the federal government agencies to tackle illegal betting sites.
Despite the challenges associated with the high license fees, the market remains an attractive one for operators. The Land of Lincoln boasts a large and passionate sports fan base, with teams such as the Chicago Bears, Chicago Bulls, and Chicago Blackhawks drawing in crowds of devoted supporters. The state’s population is diverse and growing, with over 12 million residents representing a wide range of demographics and interests.
It is also possible that Betway is simply focusing its resources on other markets. The company is already licensed to operate in several other states, and it may be that it has decided to prioritize those markets over Illinois.
What Does This Mean for Illinois?
The loss of Betway is a blow to the Illinois online sports betting market. The British iGaming and sports betting operator is a well-established and respected brand, and its withdrawal from the market could make it more difficult for other operators to attract customers.
However, the loss of Betway is not necessarily a fatal blow to the market. There are still several other major operators that are licensed to operate in Illinois, and the market is still growing. Another operator may step in to fill the void left by Betway.
Unibet Application Still Pending
The IGB also announced it was tabling the initial vote on Unibet’s application to conduct mobile sports betting as a Management Service Provider. Unibet submitted its bid months ago but a decision has been delayed.
Illinois’ status as the second largest U.S. sports betting market by total handle underscores the value of these remaining licenses. However, the high price tag may prove a deterrent without adjustments. More clarity is needed on Betway’s withdrawal and the IGB’s next steps.
What Happens Next?
Betway joins other operators like FanDuel in retreating from certain jurisdictions as markets mature. High costs and fierce competition squeeze margins over time. Strategies that worked at launch may no longer prove viable. This underscores the fluid nature of the industry as companies optimize their portfolios.
Despite the high license fees, Illinois’ status as the second-largest sports betting market in the country underscores the value of gaining entry. With over $25 billion wagered since launch, the Land of Lincoln boasts a robust customer base. However, operators will need to demonstrate both financial strength and a long-term commitment to justify the costs.
With Betway’s withdrawal, all three online-only licenses now sit unclaimed. It remains to be seen if the IGB will pursue additional applicants or reduce fees to attract operators. Either outcome could impact the competitive landscape among the existing eight mobile sportsbooks.
A new entrant may capture valuable market share or force others to invest more heavily in customer acquisition and retention. The board is also likely to conduct a review of the online-only licensing process to see if any changes can be made to make the process more attractive to potential operators.
Wrapping Up
The withdrawal of Betway from the Illinois online sports betting market is a setback, but it is not necessarily a fatal blow to the market. The market is still growing, and there are still several other major operators that are licensed to operate in Illinois. The market may be able to recover from the loss of Betway.
With questions still surrounding Betway’s exit and Unibet’s pending application, uncertainty lingers in Illinois. How regulators and operators respond could shape the future of legalized sports betting in the Land of Lincoln and other developing markets nationwide. Continued monitoring of these dynamics will be crucial.
