Illinois online casinos will launch
Yes, video gaming terminals are king in Illinois. There are some 44,000 VGT units in about 8,200 locations in Illinois. The revenue from them far outstrips revenue from casinos 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.
But, Illinois, like most states, is in dire need of additional revenue.
According to figures from USGovernmentSpending.com, Illinois has the fifth highest debt in the nation at around $65 billion. Fortunately, the state’s debt as a percentage of gross state product is relatively low at 6.6%.
Yet, The Pew Charitable Trusts reports that between 2005 and 2019, Illinois was one of eight states where expenses exceeded revenue. And Pew said Illinois could operate just over 27 days on existing balances.
Meanwhile, Illinois has one of the highest state and local tax burdens in the US. The state has the seventh highest tax burden at some 12.9%.
And, Illinois has the second highest unfunded pension debt as a share of state personal income in the country at 19.2%. That’s one of the reasons revenue from the to-be-built Bally’s Chicago casino is behind directed toward the city’s police and fire pension funds.
All that combined suggests Illinois needs lots of revenue without raising taxes. Seven Illinois online sportsbooks are already operating. And six of those offer both online casinos and sportsbooks in the seven North American jurisdictions that have both.
And Illinois is already the second biggest sports betting market in terms of revenue and third biggest in handle.
So, it would be a quick and easy way to generate significant revenue for the state of Illinois to add online casinos, if they can work out a suitable deal with the VGT folks.
Illinois casinos will post a record-breaking year
It was a tough go for Illinois casinos during pandemic closures, but in 2022 the industry rebounded sharply.
Year-to-date through November (the most recent figures available from the Illinois Gaming Board), total adjusted gross revenue for the 11 Illinois casinos was over $1.234 billion. That’s up slightly from revenue of $1.230 billion in 2019, which was the most recent year prior to the pandemic. That despite attendance still being down in 2022 compared with 2019, from over 9.5 million visitors to more than 8.3 million.
That indicates that if this is a closure-free year, PlayIllinois expects even more gambling customers at Illinois casinos in 2023.
More importantly, Illinois will likely welcome five new casinos and one larger one in 2023 to further drive revenue:
- The Temporary by American Place Casino in Waukegan is expected to open very soon.
- Golden Nugget Danville is scheduled to open in March 2023
- The temporary Bally’s Chicago casino is scheduled to open at the Medinah Temple in June 2023
- Walker’s Bluff Casino Resort in Williamson County is scheduled to open sometime in 2023
- A permanent Hard Rock Rockford casino is scheduled to open late in 2023 (the Hard Rock: Opening Act temporary casino opened in 2021)
- Wind Creek Chicago Southland Casino on the border between Homewood and East Hazel Crest, IL is scheduled to open in late 2023 or early 2024
Illinois sportsbooks will regularly post billion-dollar handle months
In October, Illinois surpassed $1 billion in sports betting handle for the first time. Those are the most recent figures available from the IGB, which works about two months out in terms of releasing sports betting numbers.
PlayIllinois is predicting billion-dollar handle months will be a regular occurrence in Illinois, at least until summer.
The reason? NFL betting was the highest driver of handle in September and October in Illinois. Expect that to continue — and likely accelerate — in the December, January and February figures. And, of course, the Super Bowl is the biggest single sports betting event of the year. Last year, Illinois sports bettors wagered $60.5 million on the 2022 Super Bowl.
Also driving handle is the fact that December, like November, benefitted from betting on the World Cup.
And, the fall and winter months provide betting opportunities for the second biggest wagering sport: basketball. Add in hockey betting in those months in a Blackhawks-crazy state and then March Madness going into the spring and there’s no reason Illinois shouldn’t be talking billions in handle until at least the summer of 2023.
At least five more Illinois sportsbooks will launch
In November, PlayIllinois predicted which IL sportsbooks would be coming next.
If you count the two physical sportsbooks awaiting approval at the United Center and Wrigley Field, we believe there could be at least five new sportsbooks in Illinois by year’s end. That despite a high cost to entry.
We already know Circa is coming very soon. It is tied to the temporary Waukegan casino expected to open in January.
Our prediction is we will likely see Bally Bet and bet365 launch, as well, for reasons explained in our November article.
There are at least 14 open slots for an Illinois online sportsbook to enter the market and possibly a few more than that:
- Six via a tether with an existing licensed retail casino
- Five via a tether with new casino applicants
- Three via online-only sportsbook licenses
- Maybe as many as four connected to pro sports facilities
Price of entry is certainly an issue. Currently, the minimum price for a sportsbook license is $5 million. The price to come into the market while tethered to an original retail casino license holder was 5% of adjusted gross receipts — or a percentage of handle in the case of the two horse racing tracks. The actual price ranged from about $2.3 million to $10 million.
For any new casino or track, it’s still based on a percentage, but the minimum cost 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.