Illinois Lawmakers Renew Efforts to Legalize Online Casino Gaming

On February 7, 2025, Illinois lawmakers introduced new proposals to legalize internet casino gaming. Senator Cristina Castro and Representative Edgar Gonzalez refiled companion bills SB 1963 and HB 3080 in the General Assembly. This marks the second consecutive session in which they have sought to advance iGaming legislation after their previous attempt failed to progress beyond committee discussions in 2023-24.

Illinois presents unique challenges when it comes to tax structure between 20% and 40% at the start of Fiscal Year 2025 in July 2024.

Tax revenue and economic considerations

VGTs continue to be the leading source of gaming tax revenue in Illinois, generating $884.2 million in state receipts and an additional $152.4 million for local municipalities in 2024. By comparison, the state’s 16 casinos contributed $345.2 million in tax revenue, while sports betting brought in $244.2 million through November.

One of the key differences between the new proposals and previous efforts is an increase in the proposed tax rate for online casino operators, raising it from 15% to 25%. The bills would also allow each licensee to operate up to three individually branded internet gaming platforms, also known as “skins,” whereas master sports wagering licensees are currently limited to one.

Another provision carried over from the previous bills states that the Illinois Gaming Board “may not issue an Internet gaming license to an owner’s licensee or an organization licensee that has reduced the size of its workforce by 25% or more since Feb. 28, 2020.” However, the term “workforce” is not specifically defined within the legislation, leaving room for potential disputes, particularly from VGT operators who may oppose the measure.

With Illinois facing a projected $3.2 billion budget shortfall for Fiscal Year 2026, ers of the legislation argue that legalizing online casino gaming could provide a substantial revenue boost. Senator Castro highlighted this fiscal benefit, stating, “In a tough budget year, you’re looking at ways to increase revenue. This is one tool for that.” Proponents estimate that iGaming could generate as much as $800 million annually for the state within a few years of implementation.

The role of Chicago in the debate

Chicago’s position in the ongoing discussions about online gaming remains a significant factor. Bally’s is currently building a $1.8 billion permanent casino in the River West neighborhood, scheduled to open in September 2026. Since September 2023, it has been operating a temporary casino at Medinah Temple.

In addition to iGaming, the city is considering the legalization of VGTs. Chicago Mayor Brandon Johnson, who advocated for lifting the city’s ban on VGTs during his 2023 campaign, may play a role in shaping future discussions. Meanwhile, state Senator Donald DeWitte has introduced SB 1342, a bill that would prohibit municipalities with populations over one million from banning VGTs. Under this proposal, revenue generated from VGTs in such municipalities would be divided, with 83% allocated to the Regional Transportation Authority and 17% directed to the city.

Illinois lawmakers have also introduced various other bills addressing different aspects of gaming, including video gaming regulations and the distinction between daily fantasy sports and traditional sports betting. As legislative debates unfold, the fate of iGaming in Illinois will depend on whether lawmakers can reconcile competing interests while addressing the state’s financial needs.

Source:

Illinois lawmakers latest to file online casino legislation, igamingbusiness.com, February 11, 2025.