Bill Aims To Introduce Exchange Betting To Illinois

A proposed amendment to the current sports betting bill in Illinois seeks to introduce exchange wagering in the state.

Bob Rita, a state representative who played a crucial role in the legalization of sportsbooks in Illinois, has proposed HB 1405. This bill, if enacted, would permit two licenses for exchange wagering.

The tax rate for exchanges will be 15%.

The taxation imposed and gathered from a holder of an exchange trade wagering license should be identical to that of a master sports wagering licensee. The scope of an exchange trade wagering license is confined to exchange trade wagering, and it does not permit the licensee to partake in other forms of gambling.

The initial license fee, valid for four years, would be $500,000. License renewals would be priced at $100,000.

Explaining exchange wagering

Exchange betting is also known as peer-to-peer betting.

Simply put, it’s a wager between two people. This system would establish a legal betting marketplace where individuals can propose their own bets, hoping to garner interest from another person.

Users determine their own conditions and odds. Similar to an Illinois online sportsbook, the exchange charges a minimal fee, akin to the vig.

Illinois would be the second state to offer exchange betting

Exchange wagering is currently only allowed in New Jersey. Both Prophet and Sporttrade offer this type of betting.

The idea hasn’t yet caught on in the United States due to the Wire Act, which bans gambling across state borders. This restriction reduces the size of betting pools because exchange wagering is not as popular as traditional sports betting.

Plenty of Illinois sportsbook slots remain open

Nonetheless, if the bill is enacted, it will create two additional opportunities for entry into the Illinois online gambling market.

Currently, up to 14 sportsbook slots are still available.

Only five out of the 11 operating retail casinos in Illinois have licensed online sportsbook partners.

• BetRivers has formed a partnership with Rivers Casino in Des Plaines.
• With DraftKings at Casino Queen in East St. Louis.
• Caesars with Grand Victoria Casino in Elgin
• Barstool with Hollywood Casino Aurora
• BetMGM online and FanDuel retail are associated with the Par-a-Dice Hotel Casino in East Peoria.

Additionally, the two active horse racetracks in the state, Hawthorne and the former Fairmount Park, are permitted to establish partnerships with online sportsbooks, unlike licensed OSBs. Fairmount has teamed up with FanDuel, and the track is now known as FanDuel Sportsbook and Horse Racing. Meanwhile, Hawthorne has collaborated with PointsBet.

This means there are at least 14 available spots for an online sportsbook in Illinois to enter the market, potentially even more.

• Six tethered to an existing licensed retail casino
• Five new casino applicants connected through a tether.
• Three online-only sportsbook licenses
• Perhaps up to four are linked to professional sports facilities (The Fanduel Sports Lounge at the United Center is currently open, but requires approval to start accepting bets. A DraftKings Sportsbook at Wrigley Field is being built and is projected to open in 2023).

Online-only license slots re-opened

Then, there are three available online-only sportsbook licenses that are not tied to a physical casino. However, these licenses come with a cost of $20 million each.

The cost has evidently been a deterrent to entry as there are currently no applications for an online-only license. The Illinois Gaming Board has reopened the bidding slots. However, the bidding window will close on March 1, 2023.