How Much Potential Revenue Could Illinois Have Made On Online Casino? The Senate Report Is In

Written By Joe Boozell on July 15, 2021Last Updated on February 15, 2022
illinois senate online casino report

The Illinois State Senate has completed its report on Internet Gaming in Illinois, outlining the potential revenue that could have been produced if online casinos were legalized before the pandemic.

Despite being quotes, the figures are colorful.

According to report artists, online casino gaming in Illinois could have generated revenues ranging from $622.4 million to $1.249 billion for users over the 16-month period that began on February 28, 2020.

The report subsequently illustrates the potential tax revenue an Illinois online casino may have generated, calculated based on various smooth tax rates. The figures are as follows:

    12 %:$ 75 million to$ 150 million

  • Between 15% of $93 million and $187 million.
  • Between $100 million and $200 million: 16%
  • For amounts between $105 million and $230 million: 15% is applied to the first $25 million, and 20% is applied to the remaining balance.

In a span of approximately 14 months, legal sports betting in Illinois has produced around $53.8 million in tax revenue.

Online casino games are only legalized in Delaware, New Jersey, Pennsylvania, Michigan, and West Virginia. Although Nevada doesn’t have a physical casino, it does have a sanctioned online casino.

The authors of the Illinois report from the Commission on Government Forecasting and Accountability utilized state revenue data and demographic adjustments to compile their record.

They also examined factors such as the flourishing video gaming terminal (VGT) industry in Illinois, people’s gaming habits during the pandemic, and compared them to those in a society that has returned to normalcy.

However, the most significant obstacle to the approval of the virtual casino in Illinois is the VGT issue. Let’s analyze this further.

Why Illinois virtual casinos care about VGTs

Illinois dominates the country’s VGT market with over 40,000 VGTs, making it the largest.

West Virginia, where virtual casinos are allowed, holds the record for the most VGTs, with approximately 7,500 of them for comparison.

VGTs are seen as competitors as they provide services similar to those offered by online casinos. The authors of the reports strived to incorporate VGTs in their revenue forecasts.

Predicting the exact impact of online casinos on VGTs in the US is challenging due to the lack of precedence. Despite any preconceptions, the authors of the report have concluded that fragmentation is likely.

From the website of the report 22:

Past evidence indicates that the introduction of new gambling methods, whether it’s a completely new game or the establishment of video game terminals statewide, tends to decrease the number of games played in that area. Although the State may gain additional players and profits from online gambling, it’s plausible that a significant portion of this revenue might be sourced from pre-existing gaming industries.

The authors illustrate that since the introduction of VGTs, casinos in the Chicago area have been facing a decline in revenue.

The report concludes the section on the VGT part by stating:

However, if the tax rate levied on video gambling revenues was higher than the rates currently imposed on virtual casinos, it could be significantly lower. Despite the increase in total game revenue, the overall net value of all taxes collected may be surprisingly low.

In April 2021 alone, VGTs produced approximately $70 million in tax revenue. Naturally, this figure will not drop to zero if Illinois legalizes online casinos.

However, in the upcoming round of negotiations, politicians may fear the unknown.

Has the pandemic increased the growth of online gaming?

The report also attributes a part of the increase in US online gambling in 2020 to the pandemic, as stated on website 14.

The limited entertainment options during the pandemic probably boosted the number of new and existing players participating in gambling. Moreover, the amount bet might have risen due to increases in discretionary spending prompted by the lack of savings in other areas and/or the federal stimulus checks.

“The Commission’s hypothetical projections for Illinois must also consider these above-average numbers.”

That being said, we have yet to observe any signs of a post-pandemic decline in any state. In both New Jersey and Pennsylvania, the strong online figures seem to have become the new standard.

While it’s certainly something to monitor moving forward, it shouldn’t automatically be presumed.

What is the situation with online casinos in Illinois?

In 2021, the Illinois House and Senate proposed bills for online casinos. Although neither bill gained significant support, there is potential for the expansion of internet gaming in Illinois going forward.

Sen. Cristina Castro informed Play Illinois that they should aim for 2023.

“I’m unsure whether we can complete this within a year. We are dealing with individuals who have issues that need addressing, especially in relation to VGTs. Educating my colleagues about iGaming – what it is and what it isn’t – will take time. Maybe we should aim to lay the groundwork throughout 2022 and consider progressing it in 2023.”

The topic of online casinos was heatedly discussed during a public hearing held by the House Executive Committee in April. There were supporters and critics, with the majority of the critics coming from the Video Gaming Terminal (VGT) sector.

The upcoming years will see a legislative conflict over gaming in the Land of Lincoln.

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Boozell, Joe

Since 2015, Joe Boozell has been a college sports writer for NCAA.com. His work has also been featured in Bleacher Report, FoxSports.com, and NBA.com. In his youth, Boozell competed against both Anthony Davis and Frank Kaminsky in the Chicago basketball scene. As you can guess, the games were quite challenging.

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