5 Things Illinois Could Do With Proceeds Of Online Casinos
Last week, Play Illinois estimated that legalizing online casinos in Illinois could net the state an additional $105.6 million in tax revenue annually. What could the state do with the money to improve life for the citizens of Illinois? We have some suggestions.
Using data from The Innovation Group, as provided to the American Gaming Association, we calculated that Illinoisans bet some $1.65 billion annually on illegal online casino sites.
Of course, it is much better to regulate and tax activity that is already happening to protect those very citizens. But, also, the revenue generated from allowing online casinos could be put to very good use. And it wouldn’t involve raising taxes.
What Illinois could do with revenue from online casinos
Perhaps the best way to look at what Illinois could do with more than $105 million in additional funding annually is to focus on what Illinois governor JB Pritzker indicated were his economic priorities for his second term. He was re-elected in November 2022.
1. Decreasing Illinois’ massive pension debt of $140 billion
Yes, $105 million in additional tax revenue would be a drop in the bucket for an Illinois state pension debt that was nearly $140 billion as of December 2022. This according to the Illinois General Assembly’s Commission on Government Forecasting and Accountability.
Yet, something has to be done to tackle this massive pension problem.
We know this is something of a priority for Pritzker. After all, the state directed an additional $500 million into the state’s pension program in fiscal year 2023. Still, much more money is needed.
Illinoispolicy.org reports that, “since the inception of the state’s current funding schedule in fiscal year 1996, the state has shorted the [pension] funds by $58.5 billion.”
2. Increasing funding for child care
Pritzker wants to make Illinois #1 in the US in child care access. He told Chalkbeat Chicago that he will prioritize child care by providing more funding for child care centers and their workforce.
“There is so much more that we can do to make it easier for young families to access quality child care, and early childhood education,” Pritzker said at a press conference on Jan 4.”
Indeed, when Pritzker announced his re-election campaign in 2021, he indicated he would like there to be both free preschool and free child care in Illinois.
That takes money. Lots of it.
3. Providing free in-state college education for lower income families
On Jan. 9, during the swearing-in ceremony for his second term, Pritzker said education will be his main priority over the next four years. That includes preschool and early childcare, of course. But the governor is also still pursuing the idea of free in-state college tuition for every family with a median or lower income. It’s something he first floated in 2021.
Given the cost of post-secondary education, that will be a big nut that needs a funding source.
4. Continuing down the path of fiscal prudence
In fiscal year 2023, Pritzker has helped deliver Illinois’ first budget surplus in 22 years. More on that in a minute. But economic storm clouds are circling for an administration that prides itself on balancing the books.
So, having another major annual revenue source is of critical importance.
5. Attracting big employers to Illinois
Pritzker is an heir to the Hyatt Hotel fortune and the richest politician currently in office in the United States. Prior to becoming governor, he ran private equity firm Pritzker Group with his brother Anthony. With a net worth of $3.2 billion, the governor is said to be the richest politician currently in office in the US.
So it makes sense that business is a priority. Recently, the Madison-St. Clair Record reported that on Jan. 8 the Illinois General Assembly authorized $400 million to a new Large Business Attraction Fund.
That might mean you can cross this one off the list for items that could use funding from Illinois online casino revenue. But, consider that during the most recent election, Pritzker floated the idea of a $1 billion fund to attract major employers to Illinois. So, perhaps online casinos could help push this fund to seven figures.
Why not invest in infrastructure?
Like most states, Illinois has some crumbling infrastructure. So, why not invest in improvements? Pritzker already tackled that in his first term.
In 2019, he signed a $45 billion Rebuild Illinois infrastructure bill. It was the largest infrastructure improvement plan in Illinois history. It will improve roads, bridges, railways, universities, early childhood centers and state facilities.
Sure, infrastructure is a constant need. It’s just not a funding priority so soon after Rebuild Illinois was signed.
Does Illinois need the money from online casinos?
Does Illinois desperately need the money online casinos would deliver?
Desperately? Currently? No.
Illinois is in surprisingly good fiscal shape at the moment. But that’s a rare position for it to be in. The state’s has been mired in debt for most of its recent history.
On Nov. 14, 2022, the Governor’s Office of Management and Budget released the Illinois Economic and Fiscal Policy Report. It concluded that Illinois will have a surplus of some $1.689 billion when fiscal year 2023 ends on June 30. And the revenue forecast increased by $1.473 billion from April 2022 to November.
“This is a major sign of notable progress on state finances considering that when Governor Pritzker came into office, the structural deficit was estimated to be approximately $3.2 billion a year,” the report said. “Substantially reducing the structural deficit reflects the commitment of the Governor and the General Assembly to achieving fiscal health for Illinois for the foreseeable future.”
That led to some $1.8 billion in tax relief for Illinoisans. And Illinois deposited some $1 billion into its Budget Stabilization Fund, also known as its Rainy Day Fund. That has pushed the fund to its highest level in Illinois history. As of Oct. 31 2022, the fund had $1.045 billion in it.
Also, in the first half of FY2023, Illinois repaid its entire federal pandemic loan of $3.2 billion two years early, saving $82 million in interest.
Sounds great, right?
Except this will mark the first time in 22 years that Illinois has balanced its budget.
Illinois budget deficits forecast ahead
The global economy is teetering on the brink of recession. A recent raft of tech job layoffs is a cause for concern. As well, GOMB is currently projecting a budget surplus of some $279 million for Illinois in FY2024. But, it is projecting deficits in each fiscal year after that as follows:
- FY 2025 — $464 million deficit
- FY 2026 — $707 million deficit
- FY 2027 — $620 million deficit
- FY 2028 — $792 million deficit
At the same time, GOMB is projecting the money Illinois will earn from gaming and lottery is:
- FY 2023 — $157 million gaming / $665 million lottery
- FY 2024 — $200 million / $678 million
- FY 2025 — $230 million / $692 million
- FY 2026 — $255 million / $706 million
- FY 2027 — $270 million / $720 million
- FY 2028 — $270 million / $734 million
Certainly, as much as $105 million in additional tax revenue from legalizing and regulating Illinois online casinos will help balance the budget. Clearly, that is a priority of the Pritzker administration.
Further, legalizing online casinos in Illinois could also help fund pensions, improve child care, help give lower income families access to free in-state college tuition and attract major employers to The Prairie State.
All while protecting Illinois consumers from the perils of an activity we know they are already engaged in — illegal gambling.