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Illinois Dragging its Feet with Legal Sports Gambling Launch

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Illinois Moving Slow Compared to Neighboring States

When Governor J.B Pritzker signed the gambling bill into law back in June, sports bettors in Illinois had hoped to be able to bet on their favorite team very soon. It only took Indiana and Iowa a few months to get it up and running. That has not been the case with negotiations in Illinois moving at a very slow pace.

The Illinois Lottery has a pilot program that will offer legal sports parlay betting at up to 5,000 retail spaces across the state. While negotiations among casinos, state government and sportsbooks continue ironing out details of full on legal sports betting, this will offer gamblers in Illinois something to wet their appetites.

There is a similar program in the state of Delaware that began back in 2012. Their program requires a minimum bet of $2 and the parlay must be at least three teams. Bettors in Delaware are able to wager on professional and college sports. According to the Delaware state lottery, this form of parlay betting generated $6 million in revenue last year.

That number is expected to look drastically different now that Delaware has legal sports betting of all forms available. While the parlay option is nice, most people that take gambling on sports seriously aren't likely to invest much money because parlays are much less likely to win than a straight wager.

Proposed Fees Are Extremely High

One potential reason for the slow roll out of legalized gambling in Illinois can be attributed to the very high fees. For physical sportsbook locations, Illinois is proposing an initial licensing fee of $10 million. They would then charge $1 million every five years to renew the license.

That's not all.

Each of these potential sportsbooks would then be charged 25% of their gross revenue. These numbers are much higher than what is being paid in nearby Indiana and Iowa. The state of Illinois has also made it clear that it is not exactly in favor of mobile/online betting and the fees they are proposing to levy are a reflection of that stance.

The state has set the licensing fee for online/mobile sportsbooks at a whopping $20 million. On top of that, they will only permit three licenses throughout the entire state. These types of sportsbooks would also have to pay the 25% tax on their gross revenue. This makes It nearly impossible for casinos currently operating in the state to get involved with their already shrinking profits.

Casino Revenue Drops in Illinois

Revenue from Illinois' ten existing casinos dropped more than 3% last year. This is a trend that started over a decade ago. In 2005, state casino revenue in Illinois was $699 million. Last year casino revenue brought in $269 million which is a decline of over 60%. It's not all bad news as statewide gambling tax revenue made $1.4 billion. That figure includes video poker and slot machines that can be found in bars, restaurants and truck stops all across the state. Horse racing and the lottery are also included in that $1.4 billion figure.

The state of Illinois projects that legalized sports betting could generate as much as $350 in new annual revenue. Legislation to legalize sports betting was passed on June 28th yet there is still no clear timeline as to when Illinois plans to get the ball rolling.

In August, a study commissioned by the state was done by Union Gaming Analytics. The group came to the conclusion that a casino within Chicago city limits would "not be feasible due to the onerous tax and fee structure." It was estimated that a Chicago casino would have to pay 33.3% additional taxes on adjusted gross receipts on top of the already existing tax structure. None of this is good news for gamblers in Illinois.

Chicago Residents Will Continue to Flock to Indiana

On October 3rd, the state of Indiana will launch mobile sports betting. They already began taking legal sports betting in Indiana since September 1st. They had approved legislation back on April 24th which gave gamblers in Illinois hope that the same could be done in their state. Instead, Indiana is looking set to profit from Illinois' failure to get the ball rolling. While prospects of a Chicago based sportsbook are slim to none for 2019, Indiana can help facilitate the betting needs of residents of the Windy City.

Hammond's Horseshoe Casino in Indiana is a 45-minute drive from downtown Chicago. They also offer a free shuttle to and from their casino. Until the state of Illinois gets their act together, they will continue to allow sports bettors from the third biggest market in the country leave their state home state to spend money in Indiana. At the end of the day, gamblers don’t care about politics, they care about being able to get action on their favorite teams. For now, Illinois is dropping the ball big time as legal sports gambling does not appear to be any closer to being a reality than it did back on June 24th when the bill was first signed.