Analysis: What Will The Illinois Gambling Industry Look Like In The Future?

When the Illinois gaming expansion bill passed in 2019, it marked a serious shakeup of the state’s status quo. Now, Illinois is home to a top-tier sports betting market, and should eventually include more than 15 casinos operating in the Land of Lincoln.

And while it’s been an eventful two years, we are merely experiencing the infancy stage of Illinois gaming. Things will look different in five, 10 and 15 years from now.

In June, Illinois was the No. 3 sports betting market in the US, posting $476.5 million in handle. In May, it finished in the top-two.

And yet, Illinois has had in-person sportsbook registration since April and residents still can’t bet on IL college teams.

While sports betting in Illinois has been an undeniable success so far, there are clear problems to solve.

Meanwhile, the Illinois Gaming Board (IGB) has yet to hand out any of the six new casino licenses granted by the legislature in the past two years. The touted Chicago casino license is also drawing very little interest.

Today, we will try to project what the Illinois gaming industry will look like in five years.

What might sports betting handle totals be on a monthly basis? How many sportsbook options will we have? Will online casino gaming be legal by then? Will we have new casinos?

Let’s get into all of it.

In 5 years: Illinois sports betting

We should have online sports betting registration in Illinois.

Lawmakers never intended for in-person registration to be permanent, and the hope is that we can sign up for sportsbooks online in 2022.

Illinois should also allow betting on in-state college teams by then — in some form. The House passed a bill that would legalize in-person, in-state collegiate betting in the spring, and the Senate should vote on the bill in either October or January.

Since the bill passed 96-11 in the House, it’s a good bet that it will make it through the Senate.

The question then becomes: Will we be able to bet on Illinois, Northwestern, etc., online in five years? Well, that’s where the gray area lies.

Rep. Michael Zalewski, the strongest public supporter of repealing the in-state college betting ban, told PlayIllinois that the in-person compromise could serve as an incremental policy step toward online legalization.

If all goes smoothly with the in-person stipulation, there is a good chance the ban will be fully repealed by 2026.

Future sportsbooks, sports betting handle

There are only six online sportsbooks in Illinois right now; in five years, there should be well over 10. Even setting the over/under at 15 feels appropriate.

We already know of interest from BetMGM, Unibet, Bally’s, theScore and Golden Nugget. Consolidation could come into play for a few of these brands, but more could come out of the woodwork once Illinois returns to the online registration realm.

What about predicting the average monthly handle? Illinois registered $5.1 billion in handle for the Fiscal Year (FY) 2021, generating $380 million in adjusted gross revenue.

Eric Noggle, a senior analyst for the Illinois Commission on Government Forecasting and Accountability, cited an Oxford Economics study to PlayIllinois that concluded the state’s eventual yearly gross revenue could be significantly higher than what it is now.

Noggle wrote in an email:

“Prior to the enactment of sports wagering in Illinois, a study from Oxford Economics estimated that Illinois could potentially generate between $384 million and $680 million in adjusted gross wagering receipts per year. In its initial year, Illinois’ figures are already near this lower range of values.”

If Illinois jumps to, let’s say, $500 million in revenue in five years, that comes out to about $6.7 billion in yearly handle in comparison to a $5.1 billion mark in FY 2021. This year, March was the highest handle month at $633.6 million.

In other words, Illinois could be flirting with the occasional $1 billion month in five years. With that said, because the legal US market is so young, it’s hard to handicap future monthly handle totals with confidence.

It’s also likely a good bet that there will be multiple retail sportsbooks at Chicago stadiums by 2026. Wrigley Field is already planning for one, and the city of Chicago has taken steps to make stadium sportsbooks a reality.

In 5 years: Will we have online casino in Illinois?

Well, that’s the million-dollar question.

There is growing pessimism among industry sources that online casino legislation will get done in Illinois any time soon, but there is hope that it will pass before the five-year mark.

The House and Senate introduced online casino bills early in 2021, but neither gained steam.

Tom Swoik, the executive director of the Illinois Casino Gaming Association, said:

“Up until a month or so ago, I thought that we had a better chance. As I understand it now, the video gaming people are organized and totally against it. Though, I think five years down the road, there are ways that video gaming operators could be involved in online betting — though I’m not exactly sure how that would work.”

The video gaming terminal (VGT) industry strongly opposes online casino in Illinois due to a fear of cannibalization. And the holdup now is that many politicians are siding with the VGT advocates, as the machines are a revenue stream for bars and restaurants hit hard by the COVID-19 pandemic.

VGTs also make a lot of money for the state ($64.8 million in taxes in July). Combine that with the fact that new green-lit casinos still aren’t operational, and there is hesitation to advance online casino gaming any further.

Swoik said:

“I think it’s possible down the road. But between the recent gaming expansion bill and all of the federal money coming in, there’s not the kind of pressure for new revenue that there was a year or two ago.”

With that said, there is political willpower in favor of online casinos in the long term, based on 2021 proposed legislation. This is an issue where local elections matter quite a bit, as the state legislature will look different in 2026 than it does now.

In 5 years: How many casinos will be in Illinois?

There’s potential for 17 casinos.

While the IGB has moved at a snail’s pace in approving new casinos, the industry expectation is that at least five new casinos will be up and running by 2026. That’s in addition to two new “racinos” at Hawthorne Race Course and FanDuel Sportsbook & Horse Racing.

A casino in Chicago might not be live by then, but more on that soon.

The gaming expansion law allows new casinos in six regions of the state. They are:

• Rockford
• Williamson County
• Waukegan
• Danville
• South suburbs
• Chicago

Rockford and Williamson County should open first, as the IGB has found each “preliminarily suitable” for a license.

Bidders for the other licenses are frustrated by the slow process, but as a source put it, “five years from now is a long time.”

As for the Chicago casino

Chicago has set 2025 as a go-live date for its “mega-casino,” but it’s safe to say that nothing about the process has gone as planned thus far.

The city moved back its “Request for Proposal” deadline from August to October 2021, reportedly due to a lack of interest among operators. Potential bidders have cited high-tax rates as a reason to bow out of the process.

Swoik thinks that operators would have interest if not for the current tax rates.

“I think you’ll see in the next session an effort to change the tax structure for Chicago again.”

The next session is in January.

That could slow down the process even further, putting a five-year window in question. Rush Street Gaming — the owner of Rivers Casino — is the only company known to have interest in the Chicago casino license.

The answers to who, where, what, how and when (and in some cases, why) are still up in the air for many of these issues. But there will be no shortage of gambling options in Illinois in a half-decade from now and no shortage of gaming news between now and then.