The marketing effort by DraftKings to remotely sign up potential Illinois mobile sports betting customers is now targeting the state’s booming video gaming business.
The sports betting giant and Illinois-based slot machine route operator Accel Entertainment announced an agreement this week that will bring DraftKings’ messages and awareness to the route operator’s customer base at its more than 2,300 statewide locations.
Through Accel’s marketing channels, including the company’s in-location digital display screens, DraftKings hopes to drive awareness of, and player retention for, sports betting among slot machine players.
DraftKings will pay both Accel and the location a commission for each qualified mobile sports betting signup.
“Our agreement with DraftKings enables Accel to significantly expand our reach, not only in the locations where we already operate, but also with new potential partners as we look to continue driving growth.” Accel CEO Andy Rubenstein said in a statement.
In a note to investors, Union Gaming Group analyst John DeCree, who follows Accel, said the partnership includes “some immediate economic compensation for new customer sign-ups” as well as exclusive advertising by DraftKings.
“The DraftKings branding and sponsorship will also help drive foot traffic to VGT locations that should translate to additional coin-in, which means more revenue for Accel and its partners,” DeCree said.
The video gaming terminal market in Illinois is one of the nation’s largest, with 7,137 locations around the state – although none, currently, in the city of Chicago – that have a combined 35,680 games. The locations include bars, taverns, restaurants, convenience stores, fraternal lodges, gas stations, and truck stops – anywhere with a liquor license.
DraftKings, which launched a retail sportsbook and statewide mobile operations through the Casino Queen riverboat casino in East St. Louis, Illinois, early last month, is spending millions – according to one analyst – to sign up mobile sports betting customers remotely.
An executive order from Gov. J.B. Pritzker allowed online and mobile sportsbook registration through Sept. 19. Originally, in an effort to give land-based casinos a head start, Illinois law required on-premise registration for mobile sports wagering. Since the governor’s order, DraftKings has been focused on remote sign up, especially in the Chicago market.
DeCree said he expects Pritzker to extend the order for another month.
Still, DraftKings is taking no chances.
“There is a mad dash now to drive customer sign-ups before the order expires, after which online and mobile sports betting sign-ups must (again) be validated on-premise at a sponsor casino,” DeCree said.
DraftKings at Casino Queen, which is located across the Mississippi River from St. Louis, is a four-hour drive from Chicago. DraftKings is hoping Accel’s customer footprint in the northern part of the state and outside the Chicago Metro area will be a source of mobile sports betting sign-ups, particularly with the start of the NFL season this week.
Video gaming has surpassed Illinois’ 10 riverboat casinos in terms of gaming revenue, accounting for $1.677 billion in 2019, compared with the $1.354 billion produced by casinos.
DraftKings Chief Business Officer Ezra Kucharz said the partnership with Accel will allow the company to reach more sports bettors across the state.
“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,” Kucharz said. “We look forward to providing customers with more ways to engage with our exceptional content through Accel’s digital display screens.”
DeCree told investors the agreement is a unique way for Accel to “monetize and leverage” its network and customer. He expects the deal with DraftKings will open the company to other opportunities.
“This proves to be yet another competitive advantage for Accel in the VGT space, giving the company another arrow in its quiver when renewing, extending, or negotiating new contracts with VGT locations,” DeCree said.
Shares of Accel, traded on the New York Stock Exchange, closed at $13.46 on Thursday, up 17 cents or 1.28%. DraftKings shares, traded on the Nasdaq, closed at $42.54, up $2.16 or 5.35%.
Howard Stutz is the executive editor of CDC Gaming. He can be reached at hstutz@cdcgaming.com. Follow @howardstutz on Twitter.
