- Illinois has an interesting gambling history
- Governor Pritzker plans for sports betting revenue in his 2020 budget
- He expects $200m in revenue to come from sports betting in 2020
- This will be a combination of the license fees and tax revenues
History of gambling in Illinois
Illinois has often been a pioneer when it comes to gambling. It was the first state in the country to sell lottery tickets through the internet and the first state to pass laws to forbid online gambling. Illinois also has a long history of horse racing and riverboat casinos.
There are many great stories from the 1800s when the riverboat casinos first started to appear in the state. Horse racing betting has been legal since the 1920s and was extremely popular throughout the years. The state lottery began operating in 1974 as one of the first in the country.
Over the years, huge sums have been raised through the lottery for great causes. In 1991, riverboat casinos were made legal. Originally, they could offer gambling games only when they were moving on a river. That requirement was ended in 1999.
Land casinos were made legal in 2011 and the types of games that racetracks could offer were increased. There has been a lot of controversy over the decision to allow video gaming machines in establishments such as truck stops and bars. They have been legal since 2011 and many blame them for the rise in problem gambling figures in the state.
Chances of legal sports betting?
Illinois is one of dozens of states considering legalizing sports betting and joining the eight states that already have open sportsbooks. The new governor, J.B. Pritzker, seems to be in favor of such a move. He has included $200m (£153.5m) in tax revenues from sports betting in his budget proposal for 2020.
The governor’s budget proposal was very specific about the type of sports betting bill he favors. It would allow existing gambling facilities to offer sports betting both offline and online. Online sports betting would be allowed for people inside of state lines, as well as in the jurisdictions that have reciprocal agreements with the state.
A maximum of 20 sports betting licenses would be offered for a fee of $10m (£7.7m) and there would be an annual renewal fee of $5,000 (£3,836.5). A 20% tax would be levied on sports betting revenues for the license holders.
Oxford Economics has estimated the revenues from sports betting that Illinois might expect. Once sports betting is fully in operation, it could bring in between $384m (£295m) and $680m (£522m) annually.
The proposed 20% tax would mean annual tax revenues of between $77m (£59m) and $136m (£104m). Pritzker seems pretty confident that sports betting will be in place by 2020. His 2020 budget includes $17m (£13m) from sports betting tax revenues. Of this, $12m (£9.2m) would go into the general fund after the deduction of expenses.
License holders will be allowed to deduct as much as 90% of $2m of the initial license fee from their taxes annually for the first five years of operation.
Likeliness of passing?
The Governor’s proposal certainly looks to be well thought-out and likely will have a lot of support. A bill that the legislature is considering has slightly different proposed tax rates.
The bill calls for a 12.5% tax instead of the 20% in the governor’s proposal. A number of meetings have been held on the issue. However, the lawmakers are keen to not rush into anything and they want to clarify several points before progressing any further.