Online casino gambling bills have emerged from the House and Senate, but it is not the first time lawmakers in the Land of Lincoln have attempted to bring iGaming to the Illinois masses.
Rolling the Dice
Illinois State Representative Edgar González, Jr., D-Chicago, and State Senator Cristina Castro, D-Elgin, have introduced House Bill 3080 and Senate Bill 1963, respectively. The 25% tax rate on iGaming revenues would bring an estimated $775 million into the state’s tax coffers after five years when the market has time to mature, according to gaming industry consultancy firm Eilers & Krejcik.
However, expectations for passage of either bill are tempered as this is the third consecutive year in which online casino gaming bills have been introduced in Illinois legislative chambers.
Governor JB Pritzker has said, “iGaming is worthy of consideration.” Having the support of the corner office is always helpful, particularly when he and other lawmakers are searching for ways to close a budget deficit reported to be in the vicinity of $1 billion. Governor Pritzker announced a $55.2 billion budget in February, $16 billion higher than when he first took office in 2019, and the highest in state history.
James Hartmann, a lobbyist for FanDuel, said, “Whether or not you choose to pass legislation legalizing iGaming, it is already here. Right now, you can take out your phone and, in five minutes, be gambling real money slot machines from the app store, unregulated and untaxed.”
The Sports Betting Alliance posted the following on its website: “iGaming is already happening in Illinois, operating under legal loopholes, and making massive profits while robbing the state of hundreds of millions in potential annual tax revenue. Legalizing iGaming in Illinois regulates the industry, protects players, and unlocks new tax revenue.”
Industry Roadblocks
Sports betting is currently available in 38 states, with Missouri bringing that total to 39 at some point this year. Meanwhile, only seven states have launched online casino gambling, including New Jersey, Delaware, West Virginia, Pennsylvania, Michigan, Connecticut and Rhode Island.
The reason why sports betting has been far more embraced than iGaming is because it is considered less addictive than having a 24-hour casino at one’s beck and call on a PC or mobile device. Second, land-based casinos do not feel nearly as threatened by sports betting eating into their casino business as they do iGaming.
But in Illinois, there is another unique dynamic in play. Illinois has over 40,000 video gaming machines dotting its landscape, more than any other state. These gambling machines can be found at truck stops, gas stations, barrooms, and convenience stores. Therefore, it is not surprising that the Illinois Gaming Machine Operators Association has come out against iGaming legislation, as it could negatively impact the ancillary revenue stream provided by these machines that many small businesses rely on throughout the state.
“I think the video game terminals create a unique dynamic as it pertains to Illinois because they are so extensive throughout the state, and the invested parties in terms of the bars and taverns made a very focused push on what would happen in terms of potential revenue cannibalization there as opposed to brick-and-mortar casino revenue,” said industry insider Christopher Altruda.
The Illinois Gaming Board has also voiced its opposition to iGaming. Altruda said the board has its hands full already. “Taking on an expanded vertical like this as you’re still settling the expansion of what you had for brick-and-mortar casinos and online sports betting, it’s a very tall ask of this state agency,” Altruda said.
