New Internet Gaming Act Would Legalize Online Casinos In Illinois

Written By Dave Briggs on February 8, 2023 - Last Updated on February 9, 2023
The Internet Gaming Act would legalize Illinois online casinos. The bill was filed on Wednesday in the Illinois General Assembly.

Illinois online casinos could be coming to the Prairie state if a new bill sponsored by State Senator Cristina Castro is passed.

On Wednesday, Castro filed The Internet Gaming Act SB1656  with the Illinois General Assembly.

A synopsis of the bill says, in part that it:

“Authorizes an Internet gaming operator to offer Internet gaming in accordance with the provisions of the Act.”

Previously, State Rep. Bob Rita introduced an Internet Gaming Act in February of 2021, but that bill stalled.

A bill to legalize online casinos did not come up in the 2022 legislative session. State Rep. Michael Zalewski previously said he didn’t expect to see any major online casino developments during that year’s legislative session. But, he added, come 2023, it could be a different story.

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

Further, the new act, as filed by Castro, states that licensed operators will be taxed at 15% of adjusted gross gaming revenue and “shall offer no more than three individually branded Internet gaming skins.” Specifically, tax revenue will be directed to the State Gaming Fund. The fund supports the operations of the Illinois Gaming Board and makes transfers into the general funds for education spending.

And, the bill proposes a license fee of $250,000 and a renewal fee of $100,000.

Notably, that’s a lot less than what Illinois currently charges for a sports betting license.

For any new casino or track, the minimum cost for a sportsbook license is $5 million. A license to operate a sportsbook at a professional sports facility costs $10 million. There are three online-only sportsbook licenses available that do not require a tether to a retail casino. But, they do cost $20 million for a license.

In January, PlayIllinois calculated that Illinois could be losing out on $105 million a year in tax revenue by not legalizing online casinos.

That’s based on an American Gaming Association study produced by The Innovation Group. It concluded that more than $4 billion in taxes are lost each year in the United States to people betting just on illegal black market online casino sites.

What Illinois could do with the revenue from online casinos

Illinois needs the additional revenue. PlayIllinois made five suggestions of where to allocate online casino revenue based on what Illinois governor JB Pritzker indicated were his economic priorities.

They are:

  1. Decreasing Illinois’ massive pension debt of $140 billion
  2. Increasing funding for child care
  3. Providing free in-state college education for lower income families
  4. Continuing down the path of fiscal prudence
  5. Attracting big employers to Illinois

Responsible gambling initiatives required in new online casinos bill

The Internet Gaming Act spells out a number of responsible gambling initiatives for Illinois online casinos, including:

  • A requirement that the Illinois Gaming Board develop responsible gaming measures, including a statewide gaming database of those excluded from gambling.
  • Mechanisms to verify that gambling customers are 21 or older.
  • Each gaming site shall display the words, “If you or someone you know has a gambling problem, help is available. Call (toll-free telephone number)” or comparable language approved by IGB.
  • Each gaming app shall include mechanisms for temporary and permanent self-exclusion.

On Wednesday, the bill had its first reading. It was referred to assignments.

Opposition likely to come from VGT advocates

Complicating the legalization of Illinois online casinos is the fact the state has the most lucrative video gaming terminal market in the entire country.

Specifically, there are some 44,000 VGT units in about 8,200 locations in Illinois. And annual tax revenue from VGTs is quickly approaching $1 billion per year and have now surpassed retail casinos as the top revenue generating gaming format in Illinois

And, the many small businesses throughout the state that depend on VGT revenue are not going to cede that business to online casinos without a fight or serious compensation.

Stay tuned to PlayIllinois as we follow Senator Castro’s Internet Gaming Act through the Illinois legislature.

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Dave Briggs

Dave Briggs is a managing editor and writer for Catena Media. His expertise is covering the gambling industry in North America with an emphasis on the casino, sports betting, horse racing and poker sectors. He is currently reporting on the gaming industries in Illinois and Canada.

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