Get Down To Brass Tacks: What’s In The Illinois Online Casino Bill
Illinois State Rep. Bob Rita introduced an online casino bill in late February, which has since been referred to the Rules Committee.
Online casino gambling would be a game-changer in Illinois, should the bill pass.
- In-Depth Coverage: See who’s for and against the online casino bill.
The bill, titled the Internet Gaming Act, would legalize online slots, online table games and online poker.
Online casinos can legally operate in New Jersey, Pennsylvania, Michigan, Delaware and West Virginia. But each state has different rules and regulations, as would Illinois.
So, what’s in the Illinois Internet Gaming Act? Here are a few of the most important components.
Illinois online casino bill tax rate
The bill contains a 12% privilege tax on profits, which would be deposited into the State Gaming Fund.
This rate is notably low. Should online casino gaming pass, it wouldn’t be surprising if the tax rate is ultimately negotiated higher.
Pennsylvania, for instance, taxes 54% on online slot revenue and 16% on online table game and poker revenue.
Michigan, meanwhile, taxes 28% of the gross revenue over $12 million.
Illinois sports betting, by comparison, taxes 15% of revenue toward the state bottom line. However, we should note that online casino tax is typically higher than the sports betting tax.
Caesars Entertainment crafted the bill, Illinois Casino Gaming Association Executive Director Tom Swoik told Play Illinois, which could explain the favorable tax rate for operators.
How many online casinos could come to Illinois?
Rita’s house bill would allow for a maximum of three skins per entity.
There are 10 casinos and two horse racing tracks in Illinois if we exclude Arlington International. In total, the bill would allow for a maximum of 36 skins, though Illinois is unlikely to reach that number.
New Jersey, considered a crowded market, has fewer than 30 skins.
A skin, in this case, is a distinctly branded online gaming operator. An internet gaming licensee may contract with up to three individually branded skins.
Swoik mentioned that the number of skins is one of the few disagreement areas among Illinois casinos, so this is something to keep an eye on.
Is online poker included?
Yes, online poker is included in the bill. Not to be confused with video poker, the bill would allow you to sit at a virtual table and play against other players.
Online poker is also legal in Delaware, Nevada, New Jersey, Pennsylvania and Michigan.
Is there an in-person registration period?
Yes. Like sports betting in Illinois, there is an in-person registration period in this bill.
However, it would only last for six months. There was originally supposed to be an 18-month in-person registration period for sports betting, but Gov. JB Pritzker has mostly waived that requirement due to COVID-19.
This would require customers to visit a casino or land-based entity in order to sign up for an online casino account.
As far as casinos go, this would likely give Rivers Casino an advantage, as well as other casinos in metro areas.
Curious, as our Matt Kredell mentioned in his story, is that Caesars drafted the bill and included an in-person registration requirement.
Caesars’ two Illinois casinos are Harrah’s Metropolis and Harrah’s Joliet, which aren’t located in sprawling areas.
What are the fees for an online casino license?
In this bill, the fee for an online casino license in Illinois is $500,000. The license renewal fee is $250,000.
Again, this appears to be low and advantageous to the operators. An Illinois sports betting license, by comparison, can cost up to $10 million.
Pennsylvania, which is similar in population to Illinois, charges $4 million per online casino license.
Michigan, on the other hand, comes in on the lower side. There is a $50,000 application fee, but after that, it’s just $100,000 to secure a license and $50,000 per year to renew it after that.
Who will the operators be?
We don’t have a clear answer yet, but we can offer an educated guess based on which operators have sought out Illinois market access and operators are other online casino states.
Expect to see these gaming operators involved with Illinois online casinos. This is not a comprehensive list:
Where will online casino gaming profits go?
According to the bill text, online casino revenue will “be paid to the Department of Human Services for the administration of programs to treat problem gambling, the Pension Stabilization, and the Education Assistance Fund.”
Illinois has a pension debt issue, and while legalizing online casinos wouldn’t resolve the issue itself, it could provide the state a reliable revenue stream.