Illinois lawmakers drop online casino bills

Comprehensive Legislative Developments on Online Gambling in Illinois

Illinois is taking significant steps toward the potential legalization of online casino gaming, recently marked by the introduction of companion bills in the state’s General Assembly on February 7. This move adds Illinois to a growing list of states examining the prospects of internet gambling — a trend fueled by the increasing recognition of the online gaming industry’s revenue potential and consumer demand.

This marks the second consecutive legislative session for Senator Cristina Castro and Representative Edgar Gonzalez advocating for the legalization of internet gaming. Unfortunately, their efforts met with obstacles in the 2023-24 General Assembly, where neither bill successfully advanced out of committee. The challenge of legalizing online gambling in Illinois is underscored by the already competitive landscape, which has seen the addition of six brick-and-mortar casinos throughout the state in the past five years — four of which are permanent establishments, alongside two temporary facilities.

Moreover, Illinois boasts the largest legal video gaming terminal (VGT) network in the United States, encompassing nearly 8,700 licensees and more than 48,700 terminals. The state also holds the second-largest sports betting market in the nation, which saw a pivotal change last summer when lawmakers increased the tax rate from a flat 15% to a progressive structure ranging from 20% to 40%, effective from July 1, 2025.

VGTs: The Backbone of Gambling Tax Revenue

Video Gaming Terminals have emerged as the most substantial source of gaming tax revenue in Illinois, generating approximately $884.2 million (£712.12 million/€858.07 million) for the state and an additional $152.4 million for local municipalities in the 2024 calendar year. In comparison, Illinois’ 16 casinos contributed $345.2 million in state tax revenue, while sports betting accounted for $244.2 million through November 2023.

The current session’s bills, designated as SB 1963 and HB 3080, introduce a notable increase in the tax rate from 15% to 25%. A significant provision within these bills would permit a licensee to operate up to three individually branded internet gaming skins, a deviation from the limitation imposed on master sports wagering licensees, who are restricted to a single platform.

Additionally, the bills retain provisions stipulating 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 February 28, 2020.” The absence of a clear definition regarding what constitutes a “workforce” for a licensee raises further questions. This ambiguity could be leveraged by opponents of the bill, particularly proponents of the VGT framework, who may contest the implications of such workforce requirements.

For a comprehensive exploration of these legislative developments and their potential effects on the Illinois gambling landscape, please read the full story here.

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