Second attempt to legalize online casinos in Illinois

The focus that Illinois lawmakers are making is to get online casinos to operate legally. As the state faces budget challenges and evolving gaming preferences, the timing of these bills could not be any better.

Renewed legislative efforts for iGaming in Illinois

On February 7th, Senator Christina Castro and Representative Edgar Gonzalez filed Senate Bill 1963 and House Bill 3080, respectively, for the second time. Both Bills seek to create the Internet Gaming Act, but failed to move past Committee discussions during the 2023-2024 session.

The proposed legislation is a comprehensive framework which aims to change how people in Illinois engage with gambling entertainment. With these new Bills in place, casino operators could run multiple online brands in a three-skin approach.

The most notable change from the last time these two Bills were proposed is a substantial increase in the proposed tax rate, from 15% to 25%. There is also a provision which proposes a workforce protection measure. This would mean that any Illinois sportsbook or casino which has previously cut down its workforce by 25% or more since February 2020 would not be granted a license to operate if the Bills are successfully passed.

The current Illinois gaming empire

To get a complete picture of what is at stake, it is important to look at the current Illinois gambling ecosystem. The state is already home to an impressive gaming infrastructure, which is evidenced by the number of Video Gaming Terminals (VGT) in the state.

Illinois boasts nearly 8,700 licensees who own and operate 48,700 terminals statewide. In turn, these VGTs generate a vast tax revenue. Below are the figures for 2024:

• $884.2 million in state tax revenue
• An additional $152.4 million for local governments

Those are impressive numbers, but the state’s traditional casinos keep up nicely. The sixteen land-based Illinois casinos added $345.2 million in tax revenue, and the fledgling sports betting sector came through with $244.2 million up to November 2024.

Budget pressures and calculations 

As Illinois grapples with a projected $3.2 billion budget shortfall for fiscal year 2026, many of the top brass believe the two proposed Bills could be their saving grace. Since the Governor’s Office of Budget announced this shortfall news, there have been calls for the state to source other means of revenue in order to continue supporting the state.

However, the passage of these Bills is not entirely. VGT operators are in no mood to lose their customers to online casinos, and they believe that the legalization of online casinos in Illinois would pose a real threat to their livelihood.

As for the workforce reduction provision, there are doubts about its implementation due to a level of  ambiguity in the way it is written. There are claims that the term “workforce” is not clearly defined, which may provide the basis for argument from opposers of the two Bills.

The future of online casinos in Illinois

While the fate of SB 1963 and HB 3080 lie in the balance, the conversations they’ve sparked are quite something. Illinois has two choices – embrace the changes or stick with the status quo. There would be consequences whatever the outcome, causing many to call for a compromise.

If a way can be found to balance tradition and revenue needs with innovation and social responsibility, then there may be an amicable end to all of this. But one thing is certain, should these two Bills be passed successfully they will have a far-reaching impact on the Illinois gambling industry.

By Mike McKean