Bill Aims To Introduce Exchange Betting To Illinois

An amendment to the existing sports betting legislation in Illinois is proposing the addition of exchange wagering within the state.

Bob Rita, a state representative instrumental in the legalization of sportsbooks in Illinois, has introduced HB 1405. If passed, this legislation would authorize the issuance of two licenses for exchange wagering.

Exchanges will be subject to a tax rate of 15%.

The taxes levied on an exchange trade wagering licensee must be the same as those imposed on a master sports wagering licensee. An exchange trade wagering license only allows the licensee to engage in exchange trade wagering and does not permit participation in other types of gambling.

The initial license fee of $500,000 is valid for four years, with license renewals priced at $100,000.

Explaining exchange wagering

Peer-to-peer betting, also referred to as exchange betting, involves individuals betting against each other instead of a bookmaker.

In essence, it is a bet made between two individuals. This system aims to create a regulated betting platform where people can suggest their own bets in the hopes of attracting someone else’s attention.

Similar to an Illinois online sportsbook, the exchange allows users to set their own conditions and odds, with a minimal fee charged, similar to the vig.

Illinois would be the second state to offer exchange betting

Only New Jersey currently permits exchange wagering, with both Prophet and Sporttrade providing this betting option.

The concept has not gained popularity in the United States because of the Wire Act, which prohibits gambling across state lines. This limitation limits the size of betting pools as exchange wagering is not as widely embraced as traditional sports betting.

Plenty of Illinois sportsbook slots remain open

However, if the bill is passed, it will lead to the creation of two more chances for entry into the Illinois online gambling market.

There are still up to 14 sportsbook slots available at the moment.

Five out of the 11 operational retail casinos in Illinois have licensed partners for online sportsbooks.

• BetRivers and Rivers Casino in Des Plaines have joined forces in a partnership.
• At Casino Queen in East St. Louis, you can find DraftKings.
• Caesars operates Grand Victoria Casino in Elgin.
• Barstool teams up with Hollywood Casino Aurora
• The Par-a-Dice Hotel Casino in East Peoria is affiliated with BetMGM online and FanDuel retail.

Furthermore, Hawthorne and the former Fairmount Park, the two active horse racetracks in the state, have been granted permission to form partnerships with online sportsbooks, a privilege not extended to licensed OSBs. Fairmount Park has joined forces with FanDuel, rebranding as FanDuel Sportsbook and Horse Racing. Similarly, Hawthorne has partnered with PointsBet.

This indicates that there are a minimum of 14 open slots for an online sportsbook to join the Illinois market, with the possibility of additional opportunities.

• Six connected to a pre-existing authorized retail casino
• Five new casino applicants were linked together by a tether.
• Three online-only sportsbook licenses
• Possibly four professional sports facilities are connected to sports betting, with The Fanduel Sports Lounge at the United Center already open and awaiting approval to accept bets. Additionally, a DraftKings Sportsbook is under construction at Wrigley Field and is expected to open in 2023.

Online-only license slots re-opened

Additionally, there are three online-exclusive sportsbook licenses available that are not associated with a brick-and-mortar casino. These licenses require a payment of $20 million each.

The high cost has discouraged potential applicants from seeking an online-only license, leading to a lack of current applications. The Illinois Gaming Board has now reopened the bidding process, but interested parties must submit their bids before the deadline on March 1, 2023.