Get Down To Brass Tacks: What’s In The Illinois Online Casino Bill
In late February, an online casino bill was introduced by Illinois State Rep. Bob Rita and has since been referred to the Rules Committee.
Should the bill pass, online casino gambling could revolutionize Illinois.
- Comprehensive Report: Discover the supporters and opponents of the online casino bill.
The Internet Gaming Act, as the bill is titled, would authorize online slots, online table games, and online poker.
Online casinos are legally permitted to operate in New Jersey, Pennsylvania, Michigan, Delaware, and West Virginia. However, each of these states has its own set of rules and regulations, similar to Illinois.
So, what does the Illinois Internet Gaming Act entail? Here are some of its key elements.
Illinois online casino bill tax rate
The bill includes a 12% privilege tax on profits that would be placed into the State Gaming Fund.
This rate is significantly low. If online casino gaming is approved, it wouldn’t be shocking if the tax rate is eventually bargained to be higher.
For example, Pennsylvania imposes a 54% tax on online slot revenue and a 16% tax on online table game and poker revenue.
Meanwhile, Michigan imposes a tax of 28% on the gross revenue that exceeds $12 million.
Compared to other forms of gambling, Illinois taxes 15% of sports betting revenue for the state’s bottom line. It’s worth noting, though, that online casino taxes are usually higher than those for sports betting.
Tom Swoik, Executive Director of Illinois Casino Gaming Association, informed Play Illinois that the bill was crafted by Caesars Entertainment. This could potentially explain the favorable tax rate for operators.
How many online casinos could come to Illinois?
Rita’s house bill would permit a maximum of three skins for each entity.
If we disregard Arlington International, Illinois hosts 10 casinos and two horse racing tracks. The proposed bill sets a limit of 36 skins, a number that Illinois is not expected to reach.
New Jersey, thought of as a congestive market, has less than 30 skins.
In this context, a skin refers to a uniquely branded online gaming operator. An online gaming licensee has the option to contract with up to three separately branded skins.
Swoik pointed out that the number of skins is a contentious issue among Illinois casinos, indicating that it’s something to monitor closely.
Is online poker included?
Indeed, the bill encompasses online poker. It should not be mistaken for video poker, as the bill permits you to participate in a virtual table game against other participants.
Delaware, Nevada, New Jersey, Pennsylvania, and Michigan also have legal online poker.
Is there an in-person registration period?
Indeed, similar to sports betting in Illinois, this bill also includes a period for in-person registration.
However, this would only be in effect for six months. Although there was initially an 18-month in-person registration period for sports betting, Governor JB Pritzker has largely suspended this requirement due to the COVID-19 pandemic.
Customers would need to visit a physical casino or land-based establishment to register for an online casino account.
This would likely provide Rivers Casino with an advantage, as well as other casinos in metropolitan areas, in terms of casinos.
As Matt Kredell, one of our own, mentioned in his story, it’s intriguing that Caesars drafted the bill and included a requirement for in-person registration.
Harrah’s Metropolis and Harrah’s Joliet, the two Illinois casinos owned by Caesars, are not located in expansive areas.
What are the fees for an online casino license?
This bill stipulates that the cost for an online casino license in Illinois is $500,000, with a renewal fee of $250,000.
This seems to be low and beneficial for the operators once again. For comparison, a sports betting license in Illinois can cost as much as $10 million.
Pennsylvania charges $4 million per online casino license, a rate similar to that of Illinois, which has a comparable population.
On the other hand, Michigan falls on the lower end of the spectrum. They charge a $50,000 application fee, followed by a $100,000 fee to obtain a license. The annual renewal fee thereafter is $50,000.
Who will the operators be?
We don’t yet have a definitive answer. However, we can make an informed assumption based on the operators who have pursued access to the Illinois market and those in other states with online casinos.
Anticipate seeing these gaming operators engaged with Illinois online casinos. This list is not exhaustive:
- Rush Street
- DraftKings
- FanDuel
- Caesars
- BetMGM
- Golden Nugget
- Hard Rock
Where will online casino gaming profits go?
The bill text stipulates that revenue generated from online casinos will be allocated to the Department of Human Services to manage programs aimed at treating problem gambling, stabilizing pensions, and aiding the Education Assistance Fund.
Illinois is dealing with a pension debt problem. Legalizing online casinos may not fix the problem entirely, but it could furnish the state with a dependable source of income.