Illinois Considers Legalization of Sports Betting

Chicago skyline at sunset

Illinois is debating the issue of sports betting legalization and also looking at fantasy sports betting during a hearing before two house subcommittees.

Legislators have already held a hearing about the potential expansion of gambling laws in the state. Plans are being considered to implement more casinos in the region and introducing slot machines at some horse racing tracks.

Since the Supreme Court decided to end the federal ban on sports betting in May 2018, many states have been seriously considering the legalization of sports wagering.

A lot of officials are bullish on sports betting in Illinois. Representative Mike Zalewski, the House Revenue Committee chair, recently spoke about this issue: “It can sort of be the tie that binds the different industries and the bricks and mortar to one unifying approach going forward. All of these things have the opportunity to bring the stakeholders together and figure out the best path forward.”

Is gambling expansion likely?

Gambling expansion is always a tricky proposition because there are fervent campaigners on both sides of the issue.

For example, owners of casinos see increasing the number of casinos in the state as further competition and taking more potential revenue from their own operations. The same goes for the introduction of so-called racinos, which are created when slot machines are installed at horse race venues.

Numerous cities are vying for these potential new casinos. Danville and Rockford, for example, would love to get one of them. The horse racing venues say they will struggle to survive in the future if they do not find some source of additional revenue, such as slot machines.

A recent report on gambling in the state emphasized that legalization would introduce a new source of revenue for the state, although specific figures could not be accurately estimated.

The report also noted that gambling dollars are limited, so opening up the gambling sector will lead to more competition for a similarly sized pie.

People point towards the success of New Jersey since sports betting was legalized. That state has had operating sportsbooks since the middle of June. In September alone, revenues of $184m (£140m) were brought in by the various sportsbooks. Of this figure, $24m (£18m) went to the state in taxes. Of course, that’s a significant amount of revenue in a single month, which Illinois legislators will look at closely.

How would expansion look?

There are numerous directions that an expansion of gambling laws could take. For example, if sports betting were legalized, there would be a debate about whether it should be limited to physical locations or if online gambling would be allowed. In New Jersey, $104m (£79m) of the $184m wagered in September in sports betting markets was bet through online platforms.

The opposition will point out that easier access to gambling leads to an increase in problem gambling. The major sports leagues would also have their say on how sports betting would be rolled out.

The sporting leagues are constantly debating with state officials over how they can be compensated. They initially wanted integrity fees, a percentage of sports betting. Now they appear ready to settle for being paid a license fee to allow sports betting operators access to official league data.

This is despite the fact that Nevada has offered sports betting on games in these sports leagues for many years without paying them any kind of compensation.

State Senator Napoleon Harris has already backed a sports betting proposal that would levy a 12.5% state tax on all sports bets, along with a 1% integrity fee for the sports leagues. No state so far has included an integrity fee in its final sports betting bill.

Illinois wants to shake up its gambling sector in some manner after some disappointing results in recent times. While the overall gambling revenue during the last period did increase, most of it was through video gaming. Revenue from horse racing, casinos, and the lottery stayed about the same.

With video gaming expanding, officials are concerned that this will continually undercut the casino’s revenues. A lot is certainly up in the air in Illinois, but significant change looks to be on the way.

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