Tekkorp Digital Acquisition Co. has announced that it will no longer pursue an Illinois sportsbook license. The special purpose acquisition company has begun the process of winding down its operations.
Thus far, the Illinois Gaming Board has only listed the company as a candidate for one of the three online-only sports betting licenses.
After launching in September 2020, Tekkorp has announced that it will be closing its operations on October 26. The decision comes after the company was unable to secure an Illinois sports betting license, despite raising almost $300 million in its Initial Public Offering. Tekkorp had been in talks to acquire Playtech, Caliente Interactive, and Caliplay, but on Tuesday, the company confirmed that it will not be seeking an extension past the October 26 deadline to complete a deal.
In a press release, Tekkorp announced its intention to promptly return capital to shareholders within ten business days.
Tekkorp mentioned that they evaluated more than 50 potential companies, focusing on high-quality opportunities that were priced fairly.
Because of consistently high valuation expectations, a volatile market, and a shrinking IPO market, the company was unable to identify an opportunity that it deemed would offer a significant return on investment for its shareholders.
Where Illinois stands on sportsbook expansion
There are nine sportsbook operators located in Illinois.
Currently, seven of the nine operators in Illinois are operating legal online sportsbooks. These operators are:
Five more applicants are currently in the process of obtaining their licenses to offer online sports betting services in Illinois.
- Connected to the Hard Rock Rockford – Hard Rock establishment.
- Circa Sports at American Place in Waukegan.
- Unibet goes head to head with Argosy Casino Alton.
- Either Bally’s Rock Island or a potential Bally’s casino in Chicago.
- WynnBET has not revealed any affiliated casino.
Online-only sportsbooks licensing process may be reopened
A sportsbook license for an online-only platform, not associated with a physical casino, carries a price tag of $20 million, which is double the maximum cost of a license linked to a brick-and-mortar casino.
In December of last year, four companies applied to the IGB for one of the three online-only licenses that were available.
Tekkorp was the most progressed in the process before deciding to withdraw. Betway had initially applied for a license but later rescinded their application. Fubo Sportsbook’s license request was rejected. Another unidentified company has also exited the competition.
According to a spokesperson for the IGB, Joe Miller, the competitive application process may be reopened, the Chicago Tribune reported.
Illinois sports betting is big business
Since they were established in March 2020, Illinois sportsbooks have earned over $1 billion in gross gaming revenue.
It is expected that Illinois will surpass a revenue of $1 billion in 2022 when the IGB releases the numbers for August.
Illinois currently ranks second in the nation for sports betting revenue year-to-date, with earnings of over $388 million as of July. New York is in first place with revenues exceeding $682 million.
Illinois comes in third place in sports betting handle for 2022, with a total of over $5.2 billion wagered. New York leads with over $9.3 billion, followed by New Jersey with over $6.3 billion.
Online sportsbooks have fueled the growth, accounting for 96% of the total wagering volume since sports betting was legalized in 2020.
This happened in a state that set a new record by bringing in nearly $1.9 billion in gambling revenue for the fiscal year 2022, which ended on June 30. This is a $500 million increase from its previous highest revenue year in 2019 and a nearly 39% jump from 2021.
