Illinois online casinos are not yet legal. However, change is potentially on the way, you just have to wait until the Spring of 2024 to see if new legislation will be passed that legalizes online casino apps in this state.
It will be a significant move as Illinois is already one of the biggest gambling markets in the country. Despite a lack of online casinos, the state plays host to multiple physical casinos that generate mass amounts of revenue each month.
In fact, the most recent revenue report from the Illinois Gaming Board shows the state generated over $115 million in February 2023. And that is solely looking at physical casinos – consider the potential if Illinois online casino legislation is passed.
Currently, Illinois is in a state of purgatory as we wait for things to happen. Three different versions of the Illinois Internet Gaming Act are active and have been filed.
Illinois Online Casino Legislation Timeline
As mentioned above, there are three main bills up for vote:
All three of these represent different versions of the Internet Gaming Act. They’re all designed to authorize internet gaming in the state of Illinois. We won’t take a deep dive into each bill as you can click on the links to see them in all their glory. The general outline is that they dictate what licenses are required, how to get a license, age verification, taxes, and so on.
If passed, the Internet Gaming Act will allow IL casino apps to come into play, opening up a world of opportunities within the gambling industry.
It’s important to understand the current timeline of events, so you know when things are happening and how far along they are.
2/8/23 – First Two Internet Gaming Act Bills Introduced
February 8th was a significant moment in the timeline. Here, the House version of the Illinois Internet Gaming Act (HB2239) was first created and introduced. It was done so by Representative Edgar Rodriguez.
On the same day, a different version of this act was created for the Senate by Senator Cristina Castro (SB1656).
2/14/23 – Another Internet Gaming Act Bill Is Filed
Six days after the first two Internet Gaming Act bills were filed, another was created by Representative Jonathan Carroll (HB2320).
This bill is similar to the previous two in its overall goal, yet it has one significant difference. HB2320 proposes a 12% tax rate while the other two have a 15% tax rate proposal.
2/28/23 – HB2239 Enters A Second Committee
There was good news on February 28th as the Internet Gaming Act (HB2239) by Representative Rodriguez made it through an initial committee in the House.
It is now facing a second committee – the House Gaming Committee – along with 10 other bills and measures.
While a positive step, there is no reason to get carried away. At this moment in the timeline, the bill would still need to pass through two other readings before it can be kicked into action. It’s also worth noting that neither of the other two bills has made it beyond a first reading just yet. Both are currently stalled, leading to worries that they won’t be passed.
3/10/23 – HB2239 and SB1656 Re-Routed
Fast forward ten days and nothing has really changed for the better. If anything, the legislation is in a worse position than it was back in February.
SB1656 hasn’t moved since it was introduced by Senator Castro. HB2239 is yet to move through to its second reading, meaning both bills are in danger of dying. When a bill hasn’t had any action completed on it for a certain time, it dies.
There is still some hope as both of these bills have been moved to different committees. HB2239 is now with the House Rules Committee, after sitting with the House Gaming Committee and seeing no progress. This was through no fault of the bill – it was down to two cancellations by the House Rules Committee. Two hearings – March 1st and 8th – were canceled, leading to the re-routing of this bill on the 10th.
A similar fate was dealt to SB1656, which was re-routed to the Senate Assignments Committee from the Senate Executive Committee. It’s hoped that this will lead to more action being taken.
While all this is happening, HB2320 still remains in the House Rules Committee. It’s been there since its inception on February 14th.
And that is when we last heard any real news relating to Illinois online casino legislation. We’re playing the waiting game at the moment, expecting updates as they come. The outlook isn’t the best at the moment – the House Rules Committee is known as a place where bills end up and never see the light of day.
Still, there is some hope that things will change. The good news is that the deadline for these bills isn’t until May 19th. This is when the Illinois General Assembly adjourns for the year. So, there are still just under two months for things to change.
Plus, there is one other active bill relating to online gambling that may help the Internet Gaming Act reach approval as well.
IL Senator Introduces New Responsible Gambling Bill
Whenever gambling legislation is discussed, responsible gambling is at the forefront of the bills. Lawmakers want to see that there will be clear rules to help people gamble responsibly. Not only that but operators must be forced to cooperate, creating a safer place for everyone.
All versions of the Internet Gaming Act include mentions of responsible gambling. Some of the key talking points include:
- Requirements stating the Illinois Gaming Board implements strict responsible gambling measures
- The proposal of an online database of all online gamblers excluded from IL casino apps
- Better verification processes to ensure no underage gambling takes place
- Clear directions on how to receive guidance or advice on how to gamble responsibly
- Self-exclusion schemes in place on all IL casino apps or online casinos
All of these ideas are found in the SB1656 version of the Illinois Internet Gaming Act, outlined by Senator Castro.
Moreover, Representative Carroll’s bill (HB2320) has its own ideas on responsible gambling in the state of Illinois. Primarily, it wishes to direct more funds to help those with gambling issues. Illinois is just outside the top 10 states in the US when it comes to allocating public funds to helping those with gambling addiction. This bill suggests the state puts $10 million each year towards helping those with gambling problems. This is seen as a way to educate and assist individuals that don’t know how to gamble responsibly. A more educated player base could lead to more responsible gambling habits.
But, that’s not all. Everything mentioned above is included in the Internet Gaming Act bills that are currently being stalled. The good news is that there is a separate bill that’s already made it through the Senate Health and Human Services Committee.
SB1508 – Proposed By Senator Bill Cunningham
SB1508 is seen as an amendment to the Sports Wagering Act. Senator Bill Cunningham introduced it back on February 7th and it is moving quite smoothly through the different processes.
Again, you can visit the link above for a detailed look at what the bill entails. Right now, we’ll go over the main talking points.
Primarily, the aim is to tighten regulations to ensure responsible gambling is brought to the forefront of gambling websites. The key message from Senator Cunningham is that this bill 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”
In summary, it’s about proactively trying to help those that exhibit signs of problem gambling. If this bill passes, every betting website would need to implement this.
What does this mean for Illinois online casino legislation? Well, it’s good news! The fact this bill is moving through the natural processes means lawmakers are looking to make changes to the gambling industry in this state. An emphasis on responsible gambling is also a massive positive to take away. The Internet Gaming Act clearly outlines ideas and initiatives to deal with problem gambling and encourage more responsible gambling online.
What Does The Illinois Online Casino Bill Mean For Taxes?
Tax revenue is always a big talking point when new legislation is proposed. As the gambling industry in Illinois is already so massive, it stands to generate lots of new tax revenue if online gambling is approved.
The House bill and the Senate bill both have a 15% tax rate attached to them. Looking at other states with online casino licenses, we can make some rough calculations to see how much this tax rate could generate for Illinois.
The most recent forecasts suggest we could see between $160 – $250 million every year. Obviously, if the other bill with a 12% tax rate is passed, these figures will be slightly lower.
What does this mean for Illinois? Well, tax revenue generated from online gambling will go straight to the State Gaming Fund. This is in place to help the Illinois Gaming Board keep up with its general operations.
However, from here, money is also moved to the general tax funds from the state. Typically, tax revenue from online gambling will be aimed at education spending in Illinois. This means the entire state could benefit from more money dedicated to education every year.
No Legislation Currently Means The State Loses Tax Revenue
One of the main arguments being put towards lawmakers in favor of Illinois online casino legislation is that the state currently loses significant tax revenue every year. The $160 – $250 million in annual tax revenue is made all the more important when you consider what the state loses to the black market.
Without any legal Illinois online casinos, gamblers look elsewhere to place their bets. They could visit some of the many casinos in Illinois, but many prefer to gamble online. This is where things get troublesome as the only option is to dip into the black market. As such, people are using unlicensed and illegal online casinos to place bets all the time.
Aside from being wildly illegal, there’s a major problem with black market online casinos in Illinois. Where does all the money go? These black market operators are generating millions in revenue each year, yet none of it is taxed.
There was actually a fascinating study called “Sizing The Illegal And Unregulated Gaming Markets In The United States” that shone a light on lost tax revenue. It was a nationwide study that concluded over $13 billion worth of taxes are lost each year to illegal and unregulated online gambling.
When you take some of the figures from the study, it works out that Illinois alone could lose over $100 million each year in unpaid taxes from black market online casino operators. That’s a staggering amount of money that just never sees the light of day.
This more than anything underlines the importance of getting the Illinois Internet Gaming Act through the necessary channels and into action. After seeing these figures, it’s a wonder why the bills have been stalled for as long as they have been. Surely, the General Assembly must notice that the state is in dire need of online gambling regulations to prevent people from going to the black market.
Illinois Online Casino Legislation Proposes Low License Fees
Compared to the cost of other gambling licenses in the state, IL casino apps, and online casinos could pay significantly less. The proposed fees are $250,000 for a license that allows you to conduct online gambling. This is valid for four years before it must be renewed for $100,000. Each operator can have up to three different online casino variations under different brand names. Of course, each one will need the license individually.
How does the proposed license fee compare to what’s already out there?
Well, physical casinos or racetracks have to pay $5 million to get an online sportsbook license. This license fee goes up to $10 million for professional sports facilities looking to indulge in online sports betting.
Why is the proposed license fee for online casinos so low in comparison?
Nobody is 100% certain, but the previous comments on the black market may be a key factor. Going back to the aforementioned study, it was discovered that Americans bet nearly $338 billion a year with illegal online casinos. The amount of money gambled at illegal online sportsbooks was significantly less, sitting at $64 billion.
Perhaps a low license fee is used to encourage more operators to act legally, reducing the amount of money spent on the black market. What’s also interesting is how much lower is spent on illegal sportsbooks. As online sports betting is more widely legalized, it potentially shows what legislation does. Clearly, more people are encouraged to gamble illegally when there are no legal casinos available.
IL Casino Apps Potential 2024 Launch
If the Illinois online casino legislation gets approval, there are already numerous IL casino apps ready to be available at a moment’s notice.
The top ones are:
- DraftKings Casino Illinois
- FanDuel Casino Illinois
- BetMGM Casino Illinois
- BetRivers Casino Illinois
- Caesars Casino Illinois
In fact, all three are currently the top three performing online casino operators in Michigan. Meanwhile, in the biggest state for online gambling – Pennsylvania – DraftKings and BetMGM lead the way, with BetRivers and FanDuel close behind.
Video Gaming Terminals Make Life Complicated
Right now, it’s unknown exactly what is causing Illinois online casino legislation to stall. Perhaps the government doesn’t see it as a priority, or maybe the bills are receiving pushback from elsewhere.
Ironically, some of the biggest opponents of the Internet Gaming Act lie within the gambling industry itself. You’d assume that everyone inside the industry would push for the bill to be approved, opening up the potential for new revenue streams.
Unfortunately, video gaming terminals throw a spanner in the works. Illinois has a huge VGT market – the biggest in the US. To put things into context, nearly $1 billion a year is generated in tax revenue from VGT units alone. That’s more than actual physical casinos generate annually in the state.
You’ll find VGTs in over 8,000 locations here, meaning many businesses don’t want the Internet Gaming Bill to pass. They’re worried that it will mean people spend less time using VGTs, leading to a significant decrease in revenue.
Of course, nobody knows what will happen until it does. There’s a chance that many of the VGT unit operators will see a decline in players, but they could make up for this with online casinos that generate even more income. It’s mainly the smaller companies relying on VGTs that oppose the bill so much.
Legal Online Casino States – Still A Short List
There is a lot of hope that the Internet Gaming Act will be passed in Illinois this year. Even if it isn’t, this isn’t the end of the world. We have to recognize that the world of legalized online gambling is still very new in the US.
For context, internet gaming is only legal in six of the fifty states:
- New Jersey
- West Virginia
You can technically gamble at online casino sites in Nevada, but most will require an in-person payment at a physical casino location. Still, the point remains that hardly any states are able to push through the legislation right now.
We’re still very much in the early days of legalizing online gambling, but the future looks bright. Hopefully, more state governments look at issues relating to black market online gambling and recognize the smart decision is to legalize online casinos. Certainly, Illinois will benefit by getting extra tax revenue each year.
It’s not the only state pushing for a change. Two other states in the US have active online casino legislation hoping to be approved in 2023. New York and New Hampshire are the other two, meaning we could see nine states with legalized internet gaming by the end of the year.
TLDR Ilinois Online Casino Situation
We’ll end things with a general summary of what’s happening and when decisions will likely be made.
At the time of writing, there are three different versions of the Illinois Internet Gaming Act in circulation. Both HB2239 and SB1655 are the same bills, but the latter is put forward to the Senate. HB2320 was introduced a week later than these two and offers similar proposals but with a lower tax rate (12% compared to 15%).
All three bills are currently stuck. HB2239 and HB2320 are in the House Rules Committee, waiting to be seen. SB1656 is in the Senate Assignments Committee.
Hearings are likely to take place over the next few months, but there is a deadline. A decision must be made by May 19th, as this is when the Illinois General Assembly adjourns. We don’t know what will happen, but the Internet Gaming Act is well thought out and tackles many issues relating to responsible gambling and cutting down on illegal gambling.
All we can do is wait, but fingers crossed Illinois will join the six other states with legalized online gambling in the US in 2024.