Illinois Gambling Expansion to Receive Legislative Hearings

Welcome to Illinois highway sign

The Illinois State Legislature has scheduled two committee hearings amid renewed calls for a widespread gambling expansion aimed at generating revenue for the populous but deficit-laden state.

Illinois legislators will again consider legalizing several forms of gambling as a renewed expansion effort picks up the pieces of several bills left adrift in 2017. Two legislative hearings in the coming weeks will explore the many opportunities available for the cash-strapped state to consider.

According to Ilinois State Representative Bob Rita, the upcoming hearings represent the first major step in renewing the state’s efforts to pass a gambling-expansion bill. Rep. Rita was one of the primary sponsors of a planned omnibus gambling bill that passed the Illinois State Senate in May of 2017 but bounced from committee to committee in the Illinois House before efforts to bring it to a vote were abandoned last September.

The legislative measure in question, Senate Bill 0007 (SB0007), was reactivated in May of 2018 with Rep. Rita moving up to be the bill’s alternate chief sponsor. Rita has spent the last several weeks building support for the planned omnibus measure and he recently announced that hearings are scheduled for August 22 and October 2.

Widespread market opportunities available

One of the major problems facing Rep. Rita and the state’s gambling expansion efforts is how to satisfy all the prospective stakeholders in an expanded Illinois gambling market. As he recently told a home-district radio station, “As you navigate through this, when you move one component it moves three others, and you gotta carefully navigate through this to put a bill together and we’ve been working diligently on that.”

The SB0007 measure backed by Rita focused on a casino expansion in the state, which already offers ten large casino properties. However, Illinois pols have debated a mega-casino in downtown Chicago, as well as possible casino venues in border cities around the state, such as in Illinois’ second-largest city, Rockford.

That effort is intended to stanch the flow of gambling dollars flowing to neighboring states. Much of the metro Chicago area’s gambling business goes to a handful of large casino properties just over the border in northwest Indiana, while Rita’s own northwest Illinois district is adjacent to riverboat casino offerings in eastern Iowa. More riverboat casinos in and near St. Louis draw gambling traffic from the southern half of the state.

Further, a casino-expansion bill alone sits poorly with the state’s existing gambling industry, which is considering other gambling market opportunities. A separate fantasy sports bill also received extensive consideration in 2017, and now, in the wake of the US-wide sea change underway involving legalized sports betting, that market segment may receive attention above all else.

Online gambling is in the mix as well, having been among the options considered in omnibus gambling bills in several recent Illinois legislative sessions. Illinois was among the first US states to offer online lottery ticket sales; along with New York State, Illinois’ stated desire to offer its lottery online was part of the impetus behind the 2011 opinion by then-US Attorney General Eric Holder. Holder’s office opined that the US’s federal-level Wire Act of 1961 applied only to sports wagering, and not to other gambling forms.

That opinion cleared the way for the US banking system to process financial transaction for online gambling (except for the aforementioned sports betting). A handful of states, including Illinois, now offer or regulate one or more forms of online gambling. All this means that an omnibus gambling bill, as proposed by Rep. Rita and others, must choose between numerous available gaming options, each with its own supporters and opponents. As Rita told WMAY: “Fantasy sports, sports betting, internet gaming, are new components, forms of gaming that have come to the forefront.”

Budget deficits create incentive

Among the factors helping the gambling bills’ chances are the ongoing budget deficits in Illinois. The state recently endured a two-year budget stalemate between its Democrat-dominated legislature and Republican Governor Bruce Rauner that left basic services underfunded for long stretches and the state itself billions of dollars in debt.

Even the state’s approved gambling services were affected. The budget stalemate forced the state to stop paying high-dollar lottery winners for just over two years, from July of 2015 to July of 2017, when the primary budget impasse was partially resolved. During that period, however, Illinois was forced to suspend its participation in the highly profitable, multi-state Powerball and Megabucks lotteries, which occasionally generate pools of several hundred million dollars.

Though a budget is in place, Illinois’ huge deficits remain, which is a primary motivator for the gambling expansion. Rep. Rita projects that a statewide approval covering all available gambling opportunities could generate as much as $700 million annually in revenue for the state. Such a windfall is an enticing opportunity for the state’s legislators, even if it’s unlikely that everything would be legalized at once. The upcoming hearings represent the first step in what’s likely to be a complicated and contentious legalization process.

Leave a Reply

Your email address will not be published. Required fields are marked *