Online Gambling Legalization Could Generate Over $1.5 Billion In Illinois
Illinois has had a recent influx of DFS and iGaming bills, with IL HB 479 passing the Senate in a 42-10 vote. The bill would permit regulated online casinos, poker sites, and daily fantasy sports. There would also be the option to enter into online poker compacts with other states that have legalized online gaming. The bill is currently making its way back to the House.
Potential State Revenue From Online Gaming
The state of Illinois has been in a budgetary stalemate for nearly two years, with the state’s debt reaching over $11 billion in the first quarter of 2017. The legalization of online gambling and DFS would not solve all of Illinois’ monetary problems, but it would create much-needed streams of revenue.
A white paper written by gambling strategist Chris Grove found that if the bill were passed with its current taxation and licensing fees, the state could stand to make an immediate $140,620,000.
“The proposed licensing structure calls for online gambling operators to make a $10 million tax prepayment as the cost of obtaining a license. That structure provides Illinois with guaranteed, upfront revenue. While the number of licensees could ultimately vary… Illinois will likely see 13 unique applicants for gambling operator licenses, resulting in an immediate revenue injection of $130 million. Other taxes and fees will bring the total first-year haul for the state to over $140 million.”
Over a five-year period, Illinois could earn well over $255 million in state tax and fee revenues.
Benefits For Online Gambling Licensees
Currently, Nevada, New Jersey, and Delaware are the only states that have regulated online casino gaming. IL HB 479 would give existing Illinois casinos and race track operators the ability to offer online gaming activities with the proper licensing. Overseen by the Illinois Gaming Board, the Division of Internet Gaming would issue five-year licenses to state operators.
Here is a snapshot of how much operators could potentially make in gross gaming revenue:
- $280 mil in the first year for online poker and online casino operators.
- $22 mil in year 1 of regulated DFS operations, gradually increasing to $45 mil over a five year period.
- Within the first five years of legalization, licensees are expected to generate over $1.5 billion in new revenues.
Following In New Jersey’s Footsteps
Illinois is only one of several sports betting states looking to legalize online gaming and DFS. Pennsylvania has also brought forth online gambling legislation in recent months. Both states have used the success of the New Jersey online gaming industry as a regulatory blueprint.
“New Jersey has proven that online gambling can be safely regulated and serve as an economic engine,” said Grove. “The evidence is irrefutable. All of the New Jersey's casinos have confirmed that regulated online gambling drives new customers and new revenue.”
Since legalizing the activities in 2013, NJ has grossed more than $100 mil in tax revenue for the state and over $400 mil in gaming revenue for Atlantic City casinos. With the unbalanced nature of Illinois’ budget and no clear path to resolution, IL HB 479 may bring about the revival the state needs.
“Regulated online gambling has saved Atlantic City's casinos and brought some $100 million in new tax revenue to the state,” stated Grove. “That's the sort of help Illinois' casinos, the Illinois racing industry, and the state itself and all could desperately use.”