Could An Online Casino Market Gain Steam In Illinois?

Written By Joe Boozell on March 24, 2021 - Last Updated on April 30, 2021

Illinois State Rep. Robert Rita introduced an online casino bill in February. And it has us at PlayIllinois wondering: Should it pass, will legal online casino gaming explode like the online sports betting market has in the Land of Lincoln?

Since the legalization of sports betting, Illinois has already taken more than $2 billion worth of sports bets. It’s the No. 4 sports betting state in the US by monthly handle.

In January alone, IL posted $581.6 million in sports betting handle.

The state kicked off 2021 by trailing behind New Jersey, Nevada and Pennsylvania. Illinois will likely surpass Pennsylvania eventually; PA posted $615.3 million in sports betting handle in January.

We should know IL’s February sports betting numbers in a few weeks.

Remote registration has expedited the inevitable success of Illinois’ sports betting market. However, in Rita’s version of the online casino bill, there is a six-month, in-person registration period.

That would affect how quickly the online casino market could grow in Illinois. Still, in examining other states, we would expect it to quickly gain steam here.

A look at Michigan online casino market

We make one comparison in Michigan, where online casinos launched in late January. Michigan is the No. 10 state in the US by population; Illinois is No. 5.

The Great Lakes State has had a staggering amount of success thus far.

February was Michigan’s first full month of online casino gaming. In that month, MI operators profited $79.7 million, generating about $14 million in state and local tax revenue.

For reference, sports betting revenue in Illinois has never exceeded $50 million for a single month.

Michigan also offers sports betting, and in February, it reported $325.6 million in handle.

Is that a gaudy number, especially since the online market is in its infancy stages? Yes. But Illinois should eclipse that by at least $200 million in February.

We must note that there is no online casino in-person registration requirement in Michigan. If that stipulation remains in the final bill, the Illinois market wouldn’t progress as quickly as if it went remote from the start.

Also, the initial Illinois bill only taxes online casino revenue at 12%. In Michigan, online casino and online poker revenues above $12 million are taxed at 28%.

Finally, Michigan was well prepared to launch online casino gaming in January, with nearly double-digit the number of licensed operators ready to go and major brands set to spend promotional dollars.

Regardless, Michigan’s first full online casino monthly revenue report was jaw-dropping. And it crystalizes what could be possible in Illinois.

How about New Jersey and Pennsylvania?

Online casino is also legal in New Jersey and Pennsylvania.

It’s hard to compare a potential Illinois market to New Jersey, as NJ legalized online casino all the way back in 2013. The world is so much different now that it’s a bit apples to oranges.

These days, New Jersey comes in at around $90 million in online casino revenue per month, give or take.

Pennsylvania is a better comparison. In PA, huge success didn’t come as quickly as it did in MI. Online casinos launched in 2019, and didn’t collectively profit $10 million per month until about five months in.

Fast-forward to 2021, and Pennsylvania online casinos are profiting about $90 million per month. The state raked in $108.5 million in December 2020.

Why did it take longer for Pennsylvania to achieve big numbers than it took Michigan? That’s a complex question, but the primary reasons were a fewer initial operators and game offerings in PA.

Conclusion on Illinois? It depends, but potential is huge

If the online casino bill passes with no in-person registration requirement, it should grow very quickly in Illinois — possibly even faster than sports betting.

Of course, that’s also contingent on how many and which operators can get licensed from the jump. For what it’s worth, Rita’s online casino bill allows for more than 30 skins, but that doesn’t mean Illinois would have anywhere near that amount — especially right away.

Michigan, for reference, now has 11 online casinos available — a healthy number. That’s almost twice the amount of sports betting apps in Illinois.

If a bill passes with a six-month, in-person registration mandate, the market should still reach the same heights. But it wouldn’t reach them as quickly.

Michigan’s February revenue report had to have been an eye-opener for states considering online casino gambling, Illinois included.

 

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Joe Boozell

Joe Boozell has also been a college sports writer for NCAA.com since 2015. His work has also appeared in Bleacher Report, FoxSports.com and NBA.com. Growing up, Boozell squared off against both Anthony Davis and Frank Kaminsky in the Chicagoland basketball scene ... you can imagine how that went.

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