The state of Illinois is working toward legal sports betting. The latest sports betting rules call into question how well that process is coming along, however.
In the 66 pages of draft regulations, there is good, bad, and ugly. Unfortunately for Illinoisans, there is more of the latter two categories than the first.
What’s good in the latest version of the sports betting rules?
There are some highlights among the regulations. Illinois will eventually allow a true online sports wagering experience for residents and visitors.
The state plans to allow casinos to offer online betting and license “standalone” (operators with no brick-and-mortar component) online sportsbooks as well. The tax rate for the sportsbooks, while more than double that in neighboring Iowa, is less than half of Pennsylvania’s at 15%.
Another strength of the rules is that they continue to allow sports stadiums to operate sportsbooks. This increases the number of operators and allows fans convenient access while attending events.
As with most other things, what is good is in the eye of the beholder. To ascertain the value of Illinois’ regulations, it’s necessary to compare them to the rules in other states.
That comparison isn’t kind to the Prairie State. There are several parts of the current rules that are flat out bad.
Prohibited bets and the in-person registration requirement
The rules continue to make it illegal for future Illinois sportsbooks to accept any bets on in-state college athletes or teams. That means no wagering on Bradley, Illinois or Northwestern, among others.
That’s bad for the state because those are the teams that will be of greatest interest to bettors in Illinois. Instead of giving up on placing those bets, they are more likely to do so using an offshore book or crossing the border to Indiana or Iowa.
That won’t be the only thing putting Illinois sportsbooks at a disadvantage in comparison to sportsbooks in neighboring states. Illinois has kept alive the dreaded in-person registration requirement.
That means that in order to register for accounts with online sportsbooks, bettors will have to visit a brick-and-mortar extension to complete their registrations. That’s problematic because once again, offshore books and legal operators in Indiana have no such restrictions.
In Iowa, that regulation exists but it expires on Jan. 1, 2021. Illinoisans close to that border may deem it more convenient to cross the Mississippi River and place their bets at that point.
That leads to the ugly parts of Illinois’ proposals. They go beyond peculiar to just not making a whole lot of sense.
Limited operators, waiting period and operator sabotage
The first way in which Illinois deviates from standard practice is that for the first year-plus, the state will only authorize sportsbooks with brick-and-mortar components.
Furthermore, the bidding process for the initial license applications will be completely sealed. Not even a Freedom of Information Act request will be honored in regards to that process.
After those initial licenses are awarded, the Illinois Gaming Board won’t be able to issue licenses to “standalone” online sportsbook operators for 420 days. Not only is that unique to Illinois, but it complicates the in-person registration requirement, as well.
The expiration on that in-person registration requirement is when the first online-only operator is approved. That means the actual term of that requirement could be two or three years.
And yet there might be one rule that is actually uglier than any of these, however.
The undisputed ugliest rule and what could happen
A lot of states allow professional sports leagues to request that sportsbooks be barred from accepting bets on certain events. For example, MLB could request no betting on spring training games.
Illinois’ rules extend that privilege to sportsbook operators, however. No other state with legal sports betting has such a rule right now.
To demonstrate why this is problematic, suppose one sportsbook in the state is doing very well taking bets on Chicago Red Stars matches. One or several of that operator’s competitors could request the IGB stop allowing action on those matches.
While the IGB wouldn’t have to grant that request, there doesn’t seem to be an advantage to having this rule in place. The downside of it is obvious, however.
The biggest downside for the state in its latest sports betting rules is that they will, at least in the immediate term, put Illinois sportsbooks at a disadvantage in comparison to illegal offerings and legal channels in neighboring states. Hopefully, the IGB will address these issues before the regulations go final.
