New Internet Gaming Act Would Legalize Online Casinos In Illinois

Online casinos in Illinois could become a reality if a new bill, sponsored by State Senator Cristina Castro, is approved in the Prairie state.

Castro submitted The Internet Gaming Act SB1656 to the Illinois General Assembly on Wednesday.

The summary of the bill partially states that it:

Allows an online gaming operator to provide internet gaming following the stipulations of the Act.

State Rep. Bob Rita had earlier introduced an Internet Gaming Act in February of 2021, but the bill did not progress.

The 2022 legislative session did not include a bill to legalize online casinos. State Representative Michael Zalewski had earlier expressed his doubts about any significant online casino developments occurring during that legislative session. However, he noted that the situation could change in 2023.

Online casinos bill calls for a license fee of $250,000, taxed at 15%

Additionally, the new act filed by Castro indicates that licensed operators will be taxed 15% on adjusted gross gaming revenue and should offer a maximum of three individually branded internet gaming skins. The tax revenue will specifically be forwarded to the State Gaming Fund. This fund assists in running the Illinois Gaming Board’s operations and contributes to the general funds for education spending.

The bill suggests a license fee of $250,000 and a renewal cost of $100,000.

Interestingly, the current cost for a sports betting license in Illinois is significantly higher.

The base price for a sportsbook license at any new casino or track is $5 million. Operating a sportsbook at a professional sports facility has a license fee of $10 million. There are also three online-only sportsbook licenses, which are not required to be linked to a retail casino, available at a cost of $20 million each.

Play Illinois estimated in January that Illinois could miss out on $105 million annual tax revenue by not legalizing online casinos.

According to a study conducted by The Innovation Group and commissioned by the American Gaming Association, the United States loses over $4 billion annually in taxes due to individuals betting on illicit black market online casino platforms.

What Illinois could do with the revenue from online casinos

Play Illinois made five proposals for the allocation of online casino revenue, based on the economic priorities indicated by Illinois Governor JB Pritzker, given the state’s requirement for additional revenue.

They are:

1. Reducing Illinois’ enormous pension debt of $140 billion
2. Boosting child care funding
3. Offering free in-state college education for families with lower income
4. Persisting in the direction of financial responsibility
5. Drawing large employers to Illinois

Responsible gambling initiatives required in new online casinos bill

The Internet Gaming Act details several responsible gambling measures for online casinos in Illinois, which include:

• The Illinois Gaming Board must develop measures for responsible gaming, which includes creating a statewide database of individuals who are banned from gambling.
• Methods to confirm that gambling customers are at least 21 years old.
• Every gaming site is required to show the message, “If you or someone you know has a gambling problem, help can be found. Call (toll-free telephone number)” or similar wording that has been approved by IGB.
• Every gaming app must have features for temporary and permanent self-exclusion.

The bill underwent its initial reading on Wednesday and was subsequently referred to assignments.

Opposition likely to come from VGT advocates

The fact that Illinois has the most profitable video gaming terminal market in the entire country complicates the legalization of online casinos in the state.

To be precise, around 44,000 VGT units are set up in approximately 8,200 locations across Illinois. The annual tax revenue from these VGTs is nearing $1 billion a year and has now exceeded retail casinos, making it the leading revenue-generating gaming format in Illinois.

Furthermore, the numerous small businesses across the state relying on VGT revenue won’t easily surrender that business to online casinos without a battle or substantial compensation.

Keep an eye on Play Illinois as we track the progress of Senator Castro’s Internet Gaming Act through the Illinois legislature.