There was never a doubt as to which presidential candidate would claim Illinois’ 20 electoral votes in November. More ambiguous on the ballot, though, was the “Fair Tax” amendment, an attempt from Gov. JB Pritzker to help cure the state’s budget woes.
The amendment did not pass, and so the state budget is looking more dire. Pritzker said shortly after the election:
“There will be cuts and they will be painful. And the worst thing is the same billionaires who lied to you about the fair tax are more than happy to hurt our public schools, shake the foundations of our cities and diminish our state, maybe because they think it won’t hurt them.”
One way to generate much-needed revenue? By legalizing online casinos. And there is now a house bill that can make it possible, even if it may require some tweaking.
In 2019, Pritzker signed the Illinois Gambling Act into law, which legalized sports betting (among other things) in an effort to generate more state revenue. Through about six months of reporting, sports betting has netted Illinois just shy of $20.1 million in tax revenue, quickly becoming the No. 4 sports betting market in the US.
That’s not nothing, and the monthly figure will rise as the market matures. However, it’s a far cry from making a dent in the Illinois bottom line.
Money is in online casinos
Online casino gambling is legal in New Jersey, Pennsylvania, Michigan, Delaware and West Virginia.
Simply put, legal online casinos have proven to be a larger and more reliable revenue driver than sports betting.
New Jersey, for example, posted a whopping $958.7 million in online sports betting handle in January. That resulted in $12.3 million in tax revenue for the state.
By comparison, online casinos netted the state of New Jersey $18.1 million in tax dollars in January.
Let’s also take a look at Pennsylvania, where the contrast is even more stark. It’s also the most apt comparison to Illinois, as the states are nearly identical in terms of population.
PA set a record for sports betting handle in December, taking $548.8 million in bets. That came out to $12.3 million in tax revenue.
Online casinos, on the other hand, generated $28.6 million in tax revenue for Pennsylvania. A caveat: PA taxes 54% on slot revenue, which is the highest rate in the nation. For context, New Jersey taxes 15% on slot revenue.
Michigan, which is new to online sports betting and casino, brought in just over $110,000 in sports betting taxes in its first 10 days.
The state generated $4.3 million in taxes from online casinos during that span.
It’s worth noting that in State Rep. Bob Rita’s Illinois online casino bill, revenue would only be taxed at 12%, which is definitely low.
The 12% tax rate advantageous to the operators, and in order for the bill to pass, perhaps that number is negotiated upward to sweeten the deal for the state.
Safer way to expand gaming
While we don’t know how long the COVID-19 pandemic will continue, we know that Illinoisans will be dealing with it for the foreseeable future.
Online casinos present a safer way to expand gaming, as people don’t have to set foot inside a retail facility. It also provides brick-and-mortar casinos that are suffering from the economic fallout with another reliable revenue stream.
As Michigan is successfully tapping the online casino market, Illinois should do the same.