Illinois Awaits House Decision on Online Gambling Bill

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Saturday, June 17th, 2017 | Written by Shane Larson

At the end of May, the Illinois Senate voted to regulate and legalize online gambling and daily fantasy sports, but those living in the Prairie State are not getting too carried away with the news having experienced similar situations in the past. In 2016, for instance, the Senate passed an online gambling bill, only to see it be shut down in the House.

DFS Illegal in Illinois

There is a greater level of importance attached to H 479 passing in Illinois as an attorney general has declared DFS to be illegal under the law of the state, although sites such as DraftKings and FanDuel have challenged the opinion and have continued to operate in Illinois pending a legal resolve in court. This time around, however, things are progressing in the legislature in a more positive way, allowing for optimism that the state could indeed legalize DFS, with a decision by the House expected some time in June.

Overwhelming Senate Approval

H 479 was passed by the Illinois Senate, with the bill winning by a landslide of 42 to 10. Movement on the piece of legislation, which was primarily concerned with DFS, began gaining momentum recently, but online gambling soon made its way onto the bill in an apparent effort to increase interest in internet gaming among the state board. Meanwhile, the Illinois Casino Gaming Association have now stopped opposing any sort of move towards DFS legalization and as its executive director, Tom Swoik, commented following the passage of H 479:

“We thank the Senate for advancing a comprehensive framework that legalizes and regulates online gaming. Existing law, which prevents Illinois’ licensed operators from offering any gaming product online, has created a vacuum filled by operators of illegal websites. By bringing online gaming out of the shadows and into a licensed and regulated market, Illinois can garner new tax revenues and tens of millions in upfront licensing fees that can be used for classrooms, pensions and social service.”

Next Stop the House

After the Senate made its decision regarding H 479, the decision now falls upon the House on whether to give is a final seal of approval. Yet, it is not certain what the chamber will do, if anything, as the then DFS bill was ruined last year by claims of impropriety regarding lobbying on the bill. Although lobbying and opposition have now become less prevalent with the provisions added for iGaming, there is no guarantee that it will pass the House, or even be put up for a vote. Talk in Illinois says that Michael Madigan, House Speaker, is reluctant to even look at a bill that would expand state gambling.

It is also a possibility that a DFS-only bill could be reintroduced, and as DFS is outlined as a skill based game in the current bill, it is possible that the House Speaker Michael Madigan may be prepared to allow such a bill to progress in the House. That said, this would turn interests from the gaming industry that presently supports H 479 into opposition once again, making a vote in favor of DFS difficult in the House. Moreover, a level of state government support and dynamism is needed in order for progress to be made on the bill, especially with a shortfall in the state budget needed to be bridged. However, such a level of interest by Governor Bruce Rauner and the legislature has not been apparent for years.

Potential Revenues

Though legalized DFS would indeed bring forth some new, much-needed revenue, it would only be a small aspect of a budget that is aiming to reach almost $40 billion if the bill gets passed. DFS might be relied upon to bring a few extra million dollars, maybe even $5 million, while an all-embracing regulated online gambling industry may see that figure rise to as much as $50+ million, depending upon both the licensing fee structures and the tax rate. Nevertheless, as an extract explains from a white paper entitled ‘Illinois’ Online Gambling Opportunity: Analyzing Tax And Revenue Potential’:

“While the tax prepayment will obviously curtail near-term tax revenue, it won’t take long before Illinois is seeing a steady stream of tax revenue, primarily generated by regulated online gambling. New tax revenue will begin to flow in year three, and by year four Illinois will be taking in over $50 million annually from regulation of online gambling, along with another $4.5 million from daily fantasy sports.”

More Support Needed

If there is to be any voting on the bill, it will likely not happen until later this month, if it even happens at all. While the possibility of daily fantasy sports betting and online gambling legality in the state of Illinois is not entirely dead, it is certainly going to need a good deal of further support if it is ever to improve its chances of eventual success.