Illinois Lawmakers Renew Efforts to Legalize Online Casinos

Illinois legislators have once again proposed bills aimed at legalizing online casino gaming, marking the second consecutive session where such legislation has been introduced. On February 7, Senator Cristina Castro and Representative Edgar Gonzalez filed Senate Bill 1963 and House Bill 3080, seeking to establish the Internet Gaming Act. Despite previous attempts in the 2023-24 session failing to advance past committee discussions, the lawmakers are pushing forward in hopes of securing approval this time around.

Proposed Framework for Illinois iGaming

The proposed legislation would grant the Illinois Gaming Control Board authority to oversee online casino operations, ensuring compliance with state regulations. Under the bills, operators would need to pay a $250,000 licensing fee and could provide up to three branded online casino platforms or “skins.” This allowance sets online casino licensing apart from sports betting in Illinois, where master license holders are limited to a single online brand.

A key revision in this legislative effort involves an increase in the tax rate from the previously proposed 15% to 25% on adjusted gross revenue. The revenue generated from online gambling would be allocated to the State Gaming Fund, potentially bringing in substantial financial benefits for Illinois. Some estimates suggest tax revenue from the sector could reach up to $800 million annually.

However, a notable provision in the bills would restrict online gaming licenses for companies that have reduced their workforce by 25% or more since February 28, 2020, or since receiving their initial license. The measure aims to address concerns about potential job losses at land-based casinos due to online competition, a key argument from opponents of iGaming expansion.

Addressing Concerns and Expanding Gaming Opportunities

Illinois already hosts one of the most extensive regulated gambling markets in the U.S., with significant revenue contributions from video gaming terminals (VGTs), land-based casinos, and sports betting. The state operates nearly 48,700 VGTs across more than 8,700 establishments, generating $884.2 million in tax revenue for Illinois and an additional $152.4 million for municipalities in 2024. By comparison, the state’s 16 casinos contributed $345.2 million in tax revenue, while sports betting receipts totaled $244.2 million as of November 2024.

Critics of online casino legalization, particularly VGT industry stakeholders, worry that digital gambling could divert revenue away from traditional gaming venues, potentially impacting employment within the sector. Proponents argue that online casinos could supplement state revenues without significantly harming existing gambling businesses.

To address inclusivity and diversity concerns, the bills also mandate that licensed operators submit an annual report detailing efforts to improve supplier diversity. These reports would cover spending on businesses owned by women, minorities, veterans, and people with disabilities. Additionally, operators would be required to hold public workshops and job fairs to promote diversity and inclusion within the industry.

Potential Legislative Challenges and Outlook

The reintroduced online casino legislation now awaits review in the Senate and House committees. If approved, the bills would take effect immediately upon being signed into law. However, the proposed framework still faces opposition from lawmakers concerned about potential negative economic effects on brick-and-mortar casinos and VGT businesses.

Illinois Governor JB Pritzker has previously expressed interest in the idea, suggesting that online casino legalization is “worthy of consideration.” With the state facing a projected $3 billion budget deficit, proponents believe the revenue from iGaming could help address financial shortfalls. Meanwhile, Illinois is not alone in considering online casino expansion, as similar legislative efforts are currently underway in states such as Indiana, Maryland, and New York.

While the success of this renewed push remains uncertain, its introduction underscores the continued interest in expanding Illinois’ digital gambling market.

Source:

Illinois lawmakers latest to file online casino legislation, igamingbusiness.com, February 7, 2025.