State Rep. Bob Rita has introduced the Internet Gaming Act, which would bring online slot machines, table games and poker to the Land of Lincoln.
The bill would allow casinos and racetracks to pursue licenses for a $500,000 fee. There would be a maximum of three skins per entity.
Profits would be taxed at 12%, a similar number to the current sports wagering tax in Illinois.
Also similar to sports wagering: There would be an in-person registration period, lasting six months.
If it passes, online casinos have the potential to be a much bigger revenue driver for the state than sports betting. In Pennsylvania, for instance, online casino generated $28.6 million in December tax revenue. Of course, in Pennsylvania the tax rates are much higher. The state taxes slots at 54% and table games at 16%.
Sports betting, meanwhile, generated $12.3 million in December tax revenue. PA has a high online casino tax rate, but the point remains.
But back to Illinois: while the bill is a necessary first step, what chance does it have of passing?
As it stands, there are many obstacles. But there is at least one reason for optimism.
Illinois could really use the tax revenue.
Illinois ‘Fair Tax’ did not pass in November
Illinoisans were bombarded with ads about the ‘Fair Tax‘ leading up to the November election. Despite that, in somewhat of a surprise, it didn’t pass.
The Fair Tax would have increased taxes on the wealthiest 3% of residents in an effort to make up for budget shortfalls caused by COVID-19. Gov. JB Pritzker was a proponent.
In Pritzker’s recent budget address, he proposed $700 million in cuts to state agencies and $932 million in cuts to corporate and business tax loopholes.
While online casinos alone wouldn’t fix the budget problem, they would certainly help a state that is eager to generate reliable revenue streams.
The opposition Illinois online casinos could face
Back in August, our Matt Kredell reported that there are plenty of opponents to online casinos in Illinois. Among them are:
- Illinois Licensed Beverage Association
- Video gaming terminal (VGT) operators
- Owners of restaurants and bars
- Illinois Municipal League Association
- Mayors and state representatives for every community in the state that does not have a casino
- Legislators who don’t want gambling online in general
- The state lottery and lottery retailers
VGTs have helped keep various bars and restaurants afloat during COVID-19. If online casinos pass, it would arguably hurt those establishments.
Sen. Dave Syverson said the following:
Bars and restaurants that have been just devastated by the overly restrictive COVID rules from the state of Illinois need the little bit of video gaming they have going right now to help them stay in business. If they lost VGT revenue to the internet, we’d see a lot of restaurants and bars having to close.
We’ve also seen the opposition online casino could face in neighboring Indiana.
Its casino bill never even made it out of the Senate. There is also an ongoing casino industry scandal in the Hoosier State that hurt the bill’s prospects, which shouldn’t be an obstacle in Illinois.
Regardless, it goes to show that online casino legislation faces a complicated road ahead.
As far as timeline is concerned, state-government lobbyist Tom Swoik told PlayIllinois in August that if any online casino legislation passes, it would likely happen in “the last week of May.”
Why the in-person registration mandate?
While any online casino bill in Illinois is a significant step, the six-month in-person registration requirement is less than ideal.
Pritzker has suspended in-person sports betting registration for several months in a row, which has helped Illinois become the No. 4 sports betting market in the US.
Rush Street Interactive, which owns Rivers Casino, pushed for in-person registration in the sports betting bill. Rivers is located just outside of Chicago, and has a clear edge in an in-person registration world. It isn’t clear if any casino, Rivers or otherwise, is pushing this version of the bill, but the support for in-person registration does limit who might be behind the legislation.
But there will likely be many twists and turns as this story unfolds. We’ll keep you updated with the latest.