Illinois Online Casino Legalization Inching Closer To Reality
Progress is being made on legislation that would legalize online casinos in Illinois. It’s still possible the measure could pass before the Illinois General Assembly adjourns on May 19.
The House version of the Illinois Internet Gaming Act, HB2239, introduced on Feb. 8 by Representative Edgar Rodriguez, entered a second committee on Tuesday. The bill is now in the House Gaming Committee with 10 other measures. Though, the bill has had only just one of the required three readings.
However, the Senate version of the Internet Gaming Act is currently stalled. Introduced on Feb. 8 by Senator Cristina Castro, SB1655 has not moved out of the Senate Executive Committee where Castro serves as the chairwoman.
And, another Internet Gaming Act bill, HB2320 filed by Representative Jonathan Carroll, has also not moved. It was first filed on Feb. 14.
Illinois one of three states with active online casino legislation
Still, Illinois is one of just three states with active legislation that could see online casinos legalized in 2023.
Specifically, New York and New Hampshire also still have active bills that could legalize iGaming in their regions in 2023.
Currently, six state offer legal online casinos:
- New Jersey
- West Virginia
Further, across the Canadian border, Ontario legalized online casinos and sportsbooks in 2022. Currently, the province is home to 46 live gaming operators.
Responsible gambling clearly on Illinois lawmaker’s minds
A strong responsible gambling component to the Illinois bills will help them gain traction.
Carroll’s bill is notable because it includes a provision that $10 million “from the tax revenue deposited in the State Gaming Fund under this Act shall be paid annually to the Department of Human Services for the administration of programs to treat problem gambling.”
An additional $10 million annually would certainly help. In fiscal year 2021, Illinois ranked 11th in the US in terms of per capita public funds dedicated to problem gambling services. It spent $6.8 million, about half of 1% of its $1.358 billion in tax revenue, on responsible gambling.
Meanwhile, a separate bill in the Illinois Senate would amend the Sports Wagering Act. Filed by Senator Bill Cunningham, SB1508 would “require an online sports wagering licensee to, after every 10 wagers made online by an individual, display a pop-up message directing that individual to websites on gambling addiction help.”
Also, the Internet Gaming Act also spells out a number of other responsible gambling initiatives for Illinois online casinos, including:
- A requirement that the Illinois Gaming Board develop responsible gaming measures, including a statewide gaming database of those excluded from gambling.
- Mechanisms to verify that gambling customers are 21 or older.
- Each gaming site shall display the words, “If you or someone you know has a gambling problem, help is available. Call (toll-free telephone number)” or comparable language approved by IGB.
- Each gaming app shall include mechanisms for temporary and permanent self-exclusion.
Illinois online casinos bill calls for a license fee of $250,000, taxed at 15%
Both the House and Senate bills allow Illinois online casino operators to “offer no more than three individually branded Internet gaming skins.” Online casino operators are required to pay a $250,000 license fee that renews every four years at a cost of $100,000 each. The tax rate in both bills is 15%.
Specifically, tax revenue will be directed to the State Gaming Fund. The fund supports the operations of the Illinois Gaming Board and makes transfers into the general funds for education spending.
Notably, the cost to enter the market is lot less than what Illinois currently charges for a sports betting license.
For any new casino or track, the minimum cost for a sportsbook license is $5 million. Also, an license to operate a sportsbook at a professional sports facility costs $10 million. There are three online-only sportsbook licenses available that do not require a tether to a retail casino. But, they do cost $20 million for a license.
Illinois is currently losing more than $100 million a year to the black market
In January, Play Illinois calculated that Illinois could be losing out on $105 million a year in tax revenue by not legalizing online casinos.
Specifically, that’s based on an American Gaming Association study produced by The Innovation Group. The study concluded that more than $4 billion in taxes are lost each year in the United States to people betting just on illegal black market online casino sites.
Illinois needs the additional revenue. Play Illinois made five suggestions of where to allocate online casino revenue based on what Illinois governor JB Pritzker indicated were his economic priorities.
- Decreasing Illinois’ massive pension debt of $140 billion
- Increasing funding for child care
- Providing free in-state college education for lower income families
- Continuing down the path of fiscal prudence
- Attracting big employers to Illinois
Opposition likely to come from VGT advocates
Further, complicating the legalization of Illinois online casinos is the fact the state has the most lucrative video gaming terminal market in the entire country.
Specifically, there are some 44,000 VGT units in about 8,200 locations in Illinois. And annual tax revenue from VGTs is quickly approaching $1 billion per year and have now surpassed retail casinos as the top revenue generating gaming format in Illinois
And, the many small businesses throughout the state that depend on VGT revenue are not going to cede that business to online casinos without a fight or serious compensation.
Stay tuned to Play Illinois as we follow all of the Internet Gaming Act bills through the Illinois legislature.