A new partnership will help one Illinois casino expand its reach. On July 23, Casino Queen announced the company will rebrand as part of a deal with DraftKings. In many ways, the deal mirrors one signed earlier this year between Penn National and Barstool Sports, with one key exception. Officials from both Casino Queen and DraftKings made it clear this is a partnership, rather than a purchase.
“There will be no organizational structure change as far as ownership or operations are concerned,” said Stephen Miraglia, a spokesman for DraftKings.
This is where it differs from the Barstool deal. Penn National bought a 36 percent stake in Barstool, with plans to increase that to 50 percent within three years. But while the financial terms of the deals are different, the structure appears very similar. Both focus on a rebranding effort.
Under terms of the partnership, the East St. Louis riverboat casino will now be called “DraftKings at Casino Queen.” The goal is to bring in the DraftKings audience, either to the physical casino or online offerings.
“In addition to the name change, the DraftKings at Casino Queen physical retail location in East. St. Louis will be fully rebranded to reflect the new name and branding,” said DraftKings spokesman Randy Crader. “[It] will also include a retail sportsbook on-site as well, once we receive all necessary approvals.”
DraftKings’ latest SEC filing provides more details on the financial part of the deal. It doesn’t give specifics, but says it’s a “multi-year” contract, between 5 to 10 years.
“In exchange for a fee based on a percentage of net gaming revenue generated by gaming activities in [Illinois], the casino licenses DraftKings the right to offer either online or retail sports betting (or both),” the filing states.
DraftKings Deal Levels The Playing Field
The deal levels the playing field in a way. Before this, Casino Queen was the only casino in the St. Louis region not connected with a national company. That limited their ability to promote. Now they have access to the DraftKings machine, which gives them the ability to run national commercials, feature on the DraftKings app and in other materials. The app right now is key. Illinois legalized sports betting last year, but COVID-19 shutdowns put a stop to both launching physical sportsbooks and apps. In fact, the majority of casinos in Illinois currently don’t have an active sports betting app. Take the Argosy Casino Alton, for example. Their parent company is Penn National, which originally planned to have a sports betting app operational by July. Now that’s been pushed back to September.
Casino Queen meanwhile, doesn’t have to wait. As soon as DraftKings gets approval, which could come in the next week, that app can go live. It potentially gives the casino a one to two month head start on most of its competitors.
“We believe this collaboration will enhance the Casino Queen iconic brand while introducing the sports betting industry leader to our state,” said Casino Queen president Terry Downey in a press release.
The deal doesn’t just benefit Casino Queen. As Downey mentioned, this marks the first time DraftKings’ sports betting products will be available in Illinois. Under state law, DraftKings could only operate in the state by partnering with a “land-based casino,” which is why the app hasn’t been available until now.
A Sign of Things to Come
Both the DraftKings deal and the Barstool purchase point to the future. In an interview earlier this year, Penn National officials said the reason they bought a stake in Barstool was because of age. The average age of their casino guests stood at 55 as of January. Other casinos report similar issues. Data from 2019 shows 50 percent of casino visitors last year were senior citizens. They need to find ways of bringing in a younger demographic. Working with operations like DraftKings provides that opportunity. Add that age issue to the financial struggles caused by COVID-19 and you see why casinos are starting to reach out.
The only real question right now is who’s next? What company will be the next one to sign an exclusive deal? Looking at the global market, FanDuel stands out as the biggest company without a deal in place. It’s hard to imagine that will still be the case by the end of 2020. BetFair, Bet 365 and BetAmerica also come to mind as groups likely to sign deals. By this time next year, it’s likely we won’t be asking who’s next, but rather who’s left.