DraftKings CEO Jason Robins says Illinois could hold the key to expanding online casinos across the US. He thinks if iGaming is legalized in a major market state, it would unlock the North American market.
Speaking at the Craig-Hallum Online Gaming Conference, Robins said iGaming’s potential as an industry could rival or surpass online sports betting.
“I wouldn’t be surprised if it’s bigger than sports at some point for our business.”
For that to happen, of course, lawmakers in the Prairie State would need to pass legislation legalizing iGaming. And so far, all efforts to do so at the statehouse have failed.
DraftKings CEO thinks states may be looking for a new revenue stream soon
Illinois enjoys a lucrative and well-established casino industry. The 15 active casinos in Illinois have generated more than $1 billion of revenue so far in 2023. That success leads many to believe that online casinos in Illinois could be just as profitable without hindering the retail casino industry.
IGaming is still in its infancy in the US. Just six states currently offer full online casino capabilities. Some, like Nevada, offer online poker only.
Robins thinks many more states will allow iGaming if it is legalized in a few key states.
“I think if you see like in New York or in Illinois or something like that, I think that’s going to unlock some other ones in the region as well. So, we’re very bullish on iGaming.
“So really for me, iGaming is kind of the unlocked – or the hidden, not yet unlocked I should say – gem of DraftKings.”
Robins thinks a lack of legislative attention is the reason why more states do not offer iGaming. Many states have had economies boosted by COVID-19 dollars from the federal government, he said. As those dry up, state lawmakers could begin looking for new revenue streams.
“I think a lot of people are sort of sleeping on it a little bit and maybe are just focused on how big the sports side can be and not realizing the iGaming side can make the business even larger. And I think it’s something that also maybe because there wasn’t a lot of momentum in the last year or so on the legislative side, people have kind of forgotten about it a little bit. But I think that’s another one that’s only a matter of time.
“We did hit a bit of a period where I think a lot of states had their pockets full after the COVID federal relief packages. And some of those states are starting to pull their head up now and say, ‘Hey, we’re looking for new sources of revenue.’”
Online casino bills have struggled in the Illinois General Assembly
Before Illinois can unlock the US iGaming market, state lawmakers have to unlock it here first.
So far, online casino bills have struggled in the Illinois General Assembly. Two House bills were proposed in 2023 – HB 2239 and HB 2320 – but both wound up in the purgatory that is the House Rules Committee.
Joe Tabor, director of policy research at the Illinois Policy Institute, said that committee tends to be a death sentence for legislation.
“[Bills get] stuck in the House Rules Committee where, historically, bills have gone to die.”
There was a similar bill proposed in the Senate – SB 1655 – but after ending up in the Senate Executive Committee, its progress was stopped.
One of the biggest hurdles for Illinois to add online casinos is working with the video gaming terminal (VGT) industry. There are about 44,000 VGTs at approximately 8,200 locations across Illinois. The tax revenue from the slots-like machines is significant.
In 2022, the state reaped $921.4 million in tax dollars from VGTs. For Illinois to add online casino gambling, it will need the VGT industry on its side; not working against it.
It does bolster the argument, though, that online casinos would not hurt the retail casino market.
