Illinois represents one of the more progressive jurisdictions for gambling operators looking to enter and expand in the United States.

The Rich History of Gambling in Illinois

The history of gambling in Illinois reflects societal attitudes, economic needs and legislative actions. Gambling was a popular pastime among early state settlers. In the 19th century, urban centres like Chicago emerged as hubs for gambling activity, hosting everything from card games and dice to betting on horse races. These activities thrived informally, often alongside political influence and organised crime.

Public attitudes towards gambling have shifted significantly over the years. Early 20th-century reform movements aimed to curb gambling, associating it with vice and corruption. However, as social perspectives evolved, Illinois began to embrace gambling as a legitimate form of entertainment and a potential revenue stream. The legalisation of state-run lotteries and the introduction of riverboat casinos marked the beginning of regulated gambling in the state. These developments not only legitimised the industry but also underscored its role as a contributor to public finances.

In more recent times, Illinois has taken significant steps to modernise its gambling framework, recognising the growing demand for diverse options. This includes introducing video gaming terminals in local establishments and legalising sports betting. The expansion into online platforms has further cemented Illinois as a leader in the gambling sector, offering residents and visitors a broad spectrum of regulated gaming experiences.
 

The Current Situation for iGaming

Building upon its rich gambling history, Illinois has become a comprehensive hub for regulated gaming activities. In 2025, the state presents a mature and regulated gambling environment with numerous land-based and online sports betting options. Its cautious approach to online casino gaming reflects a deliberate strategy to balance market growth with regulatory oversight.

However, online casino gaming and poker remain illegal, with legislative efforts ongoing to address concerns about market saturation and revenue impact. Compared to states like New Jersey and Pennsylvania, which have embraced iGaming, Illinois lags in this sector. Nonetheless, its extensive video gaming terminal network and evolving sports betting regulations contribute to a distinctive and competitive gambling landscape.

Licence and Operational Costs

In Illinois, gambling operators must obtain specific licenses based on their activities, each with associated fees. Casino operations are regulated, and a maximum of 16 are permitted. Ten are in operation, and six new casinos are authorised under Section 7 of the Illinois Gambling Act. Under the Gambling Act and Gambling Regulations, the state’s racetracks are also eligible to offer slot machines and table games.

Sports wagering operators must secure a Master Sports Wagering Licence. 

Initial licence fees for a master sports wagering licence in Illinois depend on the operator type and licensing date. Casinos and racetracks licensed before June 28, 2019, pay 5% of their 2018 revenue or handle, capped at $10 million. Post-2019 licensees face a $5 million minimum fee or 5% of first-year revenue, whichever is greater. Online sports wagering operators and lottery providers incur a $20 million fee, while sports arenas pay $10 million. 

There are a total of 30 available master sports wagering licenses. The Sports Wagering Act also allows the IGB to issue three licenses to online-only sports wagering operators through a tender process (section 25-45, Illinois Sports Wagering Act).

About the Licence renewal, gambling operators must renew them every four years at a cost of $1 million. Alaso, they must take into account the Illinois tax structure for sport betting, with rate ranging from 20% to 40%. 

Regulatory Oversight

From casino operations, sports wagering and video gaming to horse racing and lotteries, the following agencies enforce stringent compliance standards and collaborate with operators to ensure adherence to state laws.

Illinois Gaming Board

The Illinois Gaming Board is the state’s primary regulatory and law enforcement agency. It oversees all licensed casino gambling, video gaming, and sports wagering. Its responsibilities encompass licensing, monitoring, and enforcing state laws to ensure fair and legal gambling activities. IGB approval is essential for market entry and ongoing operator compliance, making it a key player in the state’s gambling framework.

The IGB collaborates with federal agencies to enforce AML protocols, adhering to the Illinois Compiled Statutes on Money Laundering. In addition, it regulates advertising practices to prevent misleading promotions and protect consumers.

Illinois Racing Board

The Illinois Racing Board (IRB) regulates horse racing and pari-mutuel wagering, ensuring integrity and compliance within the industry. Established under the Illinois Horse Racing Act of 1975, the IRB oversees participant licensing, monitors racetrack operations and enforces betting regulations. Operators in this niche rely on the IRB for licensing and regulatory compliance, making it indispensable for maintaining operational legitimacy.

The IRB ensures accurate collections and expenditures by conducting audits and employing pari-mutuel auditors at each racetrack, maintaining public confidence in the sport. Its collaboration with other agencies and strict adherence to state laws make it indispensable for operators seeking legitimacy in Illinois's horse racing sector.

Illinois Lottery Division

Responsible for overseeing the Illinois State Lottery, this division ensures fair play, administers revenue collection and funds public services through lottery proceeds. The Illinois Lottery generates significant revenue and remains a high-profile component of the state’s gaming sector. In fiscal year 2023, the Lottery transferred $883 million to the state's Common School Fund, supporting public education. 

Operators involved in lottery-related technology or services must coordinate with this division, ensuring compliance with state laws and public expectations.

Opportunities and Outlook for State Gambling

Illinois's gambling market has continued to show impressive growth. State tax revenues exceeded $2 billion in the fiscal year ending June 2024, a 4.8% increase from the previous year. This reflects the state's well-established position as a key player in the US gambling sector, offering significant opportunities for online sportsbook and casino operators considering market entry.

With a population exceeding 12.8 million, Illinois presents a sizable and enthusiastic market for iGaming. Sports betting, in particular, has seen a marked rise in participation, driven by the widespread availability of retail and online platforms. Moreover, the tax environment offers operators a stable and predictable framework to build their operations.

The Illinois Gaming Board enforces stringent compliance measures to ensure fair play and protect consumers. While these requirements can pose initial hurdles for operators entering the market, like always, they establish a reliable and transparent environment that breeds trust among players and stakeholders.

Looking to the future, there is growing anticipation around the potential legalisation of online casino gaming in Illinois. Governor J.B. Pritzker has indicated that this proposal could be introduced in the upcoming budget cycle, recognising its potential to generate significant revenue. Early projections suggest that it could generate as much as $450 million in tax revenue during its first year of implementation, highlighting its economic appeal.

Despite these opportunities, operators must navigate certain challenges, including increasing market competition and the potential for higher tax rates following trends observed in other states. In 2024, Pritzker proposed increasing the sports betting tax rate from 15% to a progressive scale ranging from 20% to 40%, aiming to generate an additional $200 million in revenue. He defended the move by comparing Illinois's rates to other markets, stating: 

Licensing requirements for operators

Entering the Illinois sports betting market requires operators to meet stringent criteria set by the IGB. The primary challenge is navigating the comprehensive regulatory framework to ensure full compliance. 

Adherence to the following requirements is vital for operators aiming to establish a successful presence in Illinois's regulated sports betting market. Key requirements include:

Licensing and Application

Operators must obtain a Master Sports Wagering License, which involves submitting detailed applications, including business disclosures and key personnel information. The application process is thorough, ensuring only qualified entities are approved.

Physical Presence

A physical presence within Illinois is mandatory. As online-only operators are limited, this includes establishing partnerships with existing casinos or racetracks. Such collaborations necessitate significant investment in local infrastructure.

Server Location

All servers supporting online gambling activities must be located within Illinois. This ensures jurisdictional compliance and facilitates regulatory oversight.

Technical Standards

Compliance with IGB's technical standards is essential. This encompasses system integrity, security protocols, and ensuring all betting platforms meet rigorous testing requirements to maintain operational reliability.

Responsible Gambling Measures

Operators must implement strict responsible gambling measures, including self-exclusion programs and tools to prevent problem gambling, aligning with state-mandated guidelines.

Financial Stability

Another fundamental requirement is demonstrating financial stability. Operators must provide evidence of sufficient capital and financial health to support operations and withstand market fluctuations.

Employee Licensing

Key employees, including executives and operational staff, must obtain individual licences from the IGB.

Advertising Restrictions

Operators must follow strict advertising guidelines, as outlined by the IGB, and avoid misleading promotions or targeting underage individuals.

Tax Reporting and Payments

Operators in Illinois must report and remit gambling-related taxes to the Illinois Department of Revenue (IDOR) every month. Detailed revenue reports must include gross receipts, taxable amounts, and deductions, ensuring transparency and compliance with state laws. Payments and reports are submitted electronically through the IDOR's online portal. 

The reporting deadline typically falls on the 20th of each month, covering revenues from the previous calendar month. Operators are required to maintain precise financial records to support these filings and to prepare for potential audits by the IGB or IDOR. Late filings or underreported amounts can result in penalties and interest charges, making timely and accurate reporting a critical aspect of compliance. 

AML and KYC Compliance

Anti-money laundering (AML) protocols and Know Your Customer (KYC) processes must be implemented to verify player identities and prevent illicit activities that align with state and federal regulations.

How to Apply for a Licence

Securing a gambling license in Illinois necessitates a comprehensive understanding of the IGB’s structured application process. Prospective operators should meticulously prepare to meet the state's stringent regulatory standards, ensuring all prerequisites are satisfied before submission.

Basic Steps to Apply for a Gambling Licence in Illinois

Determine Licence Type: Identify the specific gambling licence required for your operations - casino, video gaming, or sports wagering.

Review Eligibility Criteria: Ensure compliance with the IGB's qualifications, including financial stability and integrity assessment

Complete Application Forms: Accurately fill out the relevant application forms corresponding to your chosen gambling activity - sports wagering, video gaming or casino gambling.

Submit Required Documentation: Provide all necessary supporting documents, such as financial records, organisational structure, and personal disclosures.

Pay Application Fees: Remit the non-refundable application fee as specified for the selected licence type.

Undergo Background Checks: Consent is required for comprehensive background investigations conducted by the IGB.

Await IGB Review and Decision: The IGB will evaluate your application and notify you of their decision.

For detailed information and access to application forms, visit the IGB's official website: https://igb.illinois.gov/

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By: Ian Macintyre