Efforts to legalize online casinos in Illinois failed during the 2023 Legislative Session. That isn’t a big surprise after many of the bills could not gain much traction. To get the green light to go legal, Illinois online casino interests will likely have to appease the strong Video Gaming Terminals market. Illinois has the most VGTs in the country. The sector is the most lucrative in the country, if not the world.
So what can online casino supporters do to make the VGT market feel like there isn’t an invasion going on?
VGTs are king in Illinois
There are around 44,000 video gaming terminals in about 8,200 locations in Illinois. The revenue from them far exceeds income from Illinois casinos.
Revenue from VGTs has increased significantly in recent years. It has gone from $395 million in 2019 to $762 million in 2022. As of the May revenue report, over $13.8 billion has been bet on VGTs in 2023.
Many small businesses throughout the state depend on VGT revenue. An Illinois lobbyist Steve Brubaker previously spoke with PlayIllinois. He said local bars and restaurants that house some of these machines won’t concede any of that business to online casinos without a fight.
“An online casino product would directly compete with the bars and restaurants, said Brubaker. “And when you do that, you get pushback not just from the VGT companies, but from all those local restaurants and bars and mayors that the legislator is dependent on for getting reelected.”
There would need to be some incentive or security for these local businesses to feel comfortable with online casinos coming to the Prairie State. So until regulations change, it would take a big operator willing to spend a lot of money to help push the legalization of online casinos in Illinois across the finish line.
Illinois needs more money to come in
Illinois was one of several states looking to allow legal online casinos in 2023. Many view the effort as a way to create alternative revenue sources instead of raising taxes on their residents. However, like most states, Illinois is in dire need of additional revenue.
According to figures from USGovernmentSpending.com, Illinois has the fifth highest debt in the nation at around $65 billion. Additionally, The Pew Charitable Trusts reports that between 2005 and 2019, Illinois was one of eight states where expenses exceeded revenue.
Perhaps the biggest argument for legal Illinois online casinos is the fact that residents of the Prairie State are already gambling serious money on illegal, unregulated sites. A PlayIllinois analysis of numbers produced by the American Gaming Association suggests Illinoisans could be gambling as much as $1.65 billion annually with illegal online casinos. That amounts to some $660 million in lost revenue.
Illinois already allows online sports betting, which has been a solid addition for the state. Since March 2020, Illinois has already become the second-biggest sports betting market in the country in terms of revenue and third-biggest in handle. There are seven legal Illinois online sportsbooks currently operating. Six of those offer both online casinos and sportsbooks in the seven North American jurisdictions that have both.
Across the country, the tax and payment rates for internet gaming range from about 20% to 28%, depending on how much money a casino generates from online gambling. So, in theory, adding online casinos would be a quick and easy way to generate significant revenue for the state of Illinois if they can work out some sort of arrangement with the VGT crowd.
