In Search of Transparency: Illinois Looking to Limit Legislator Ties to Gambling Operators

Written By Derek Helling on December 31, 2019 - Last Updated on January 6, 2020
Land of Lincoln looking to limit gambling lobbying power

If a recently proposed bill becomes law, former state employees in the Land of Lincoln will have a new limit to their career options in the private sector. A potential Illinois lobbying ban would apply to the gambling industry.

The bill effectively would ban former public servants in Illinois from accepting work for gambling operators for a year after their public employment ends. HB 3997 has more to it than just that, however.

Contents and reasoning behind the new Illinois lobbying ban bill

The bill covers ownership of a stake in a gambling company as well. It bans state employees, their immediate families or anyone in their households from owning such a stake in a gaming operator that is licensed in Illinois during and for two years after their time working for the state.

It also requires anyone who becomes a state employee to divest existing holdings in such a company. These tenets wouldn’t apply to publicly traded companies like DraftKings will soon be, however, as long as the holding doesn’t amount to a controlling interest.

The purpose of this bill is quite clear. The idea is avoiding even a perception of a conflict of interest. That will soon become very important in the Land of Lincoln.

State employees, like members of the Illinois Gaming Board, will soon make decisions on several matters pertinent to gambling. That includes casinos and sportsbooks.

The state recently sent out applications for sportsbook licenses. The IGB will play a part in where to place a future Chicago casino, as well.

Why this is a timely bill in Illinois regarding gambling

If state employees with the power to influence decisions on matters like whether a license application is approved also own a stake in those companies, it’s a bad optic. It at least suggests that certain companies could receive favorable treatment.

On the other side of the bill, it’s been common practice in the past for private companies to offer public servants jobs after they leave office in exchange for favors while in office. The proposed moratorium may decrease those types of arrangements.

It’s fair to ask whether a moratorium of just a year is sufficient, though. A fair argument is that such a statute pays lip service to integrity while not actually working toward that end.

It’s possible that legislators might extend that term in later versions of the bill. Similar bans in other states have terms of up to five years.

It’s uncertain how much support this bill has as currently written. While some similar restrictions exist in other states like neighboring Missouri, this would be the first to specify gambling interests.

If Illinois does enact such a law, it’s also unclear whether other states would follow suit. There is another potential consequence as well.

How the bill could backfire if it becomes law

Gambling operators are already wary of investing in the Land of Lincoln because of the high tax rate that is part of the state’s new expanded gambling law. Because many states have casinos and legal sports betting, operators have choices about where to spend their resources.

If Illinois is the only state to deny gambling companies such liberties, as much as it works to instill public trust and integrity, such a move may exacerbate that hesitation. The appeal of the state’s population may outweigh those concerns, however.

Illinois is banking on its market being desirable despite high taxes and other restrictions. It may soon further test those waters by becoming the first to restrict state employees’ associations with gambling companies.

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Derek Helling

Derek Helling is a lead writer for PlayUSA and the manager of BetHer. He is a 2013 graduate of the University of Iowa and covers the intersections of sports with business and the law.

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