Illinois Sports Betting Bill Signed into Law

June 28th, 2019

Illinois Sports Betting Bill Signed into Law

Illinois Gov. J.B. Pritzker signed a sweeping gaming expansion bill into law Friday, opening the way for a massive new casino in the Chicago area and permitting online sports betting across the state. The final approval in Illinois is the biggest development yet in the nascent U.S. sports betting industry, and opens up America’s third-most populated city and sixth-most populated state to legal wagering.

An early backer of sports betting legislation, Pritzker ended the long-fought battle for U.S. sports betting with the stroke of his pen.

One of the most sought-after jurisdictions in the sports betting expansion race, Pritzker’s signature on the gaming bill will reverberate across the region and national gaming environment as a whole. Now sports betting is poised to arrive of the most iconic sporting venues in the nation, bringing unprecedented exposure to the industry.

With more than 12.5 million residents, the sports betting authorization in Illinois opens a significant new population to legal wagering. Combined with similar moves already signed into law in neighboring Iowa and Indiana, the Illinois bill further cements the Midwest’s role as a gaming hotbed and one of the most important regions in America for the industry’s future and could become home to top sportsbooks.

Illinois race tracks, casinos and even sports stadiums including Wrigley Field and Soldier Field will all be eligible to take bets, possibly before the end of the year. State regulators will need to approve all applicants before they can take wagers, but some operators believe this process should conclude quickly enough to allow them to take bets sometime in 2020.

The land-based entities also hope to have their online and mobile offerings up and running as early as this year. Any eligible bettor physically located within the state will be able to place a bet from within Illinois’ borders via a mobile device.

Its central location, population, iconic sports teams and online accessibility make Illinois one of, if not the single most significant jurisdiction to approve sports betting thus far.

Illinois Cobbles Together Massive Expansion

Though there was widespread political support for gaming expansion (sports betting inclusive) in theory, this proved much harder to achieve in practice.

Illinois lawmakers took up the sports betting question in May of last year, shortly after the Supreme Court struck down the federal ban and allowed states like Illinois to determine for themselves if they wanted legal sports betting. Facing the nation’s most dire financial situations, legislators were broadly supportive of any initiative that could generate revenue for its beleaguered treasury.

But under then-governor Bruce Rauner, the legislative and executive branches couldn’t reach concurs on a sports betting bill. The state’s horse tracks, casinos, video lottery terminals and lottery all wanted a leading role in the debates – and actions that benefited themselves, typically at the expense of their competitors. The 2018 session concluded without any passed legislation- and lingering concerns about the viability of the proposal.

With months to prepare for the 2019 session, gaming backers were more hopeful about reaching an agreement than they had been the year prior. But those same conflicting gaming interests again battled with lawmakers and each other in the legislative process, leading to a months-long stalemate that seemed to doom the bill.

Largely due to pragmatic moves by lawmakers, as well as guidance from new Gov. J.B. Pritzker, legislators hammered through a compromise measure in the final hours of the 2019 session. Elected officials even agreed to extend the session, allowing enough time to not reach consensus, but pass the bill through both chambers.

Bill Approved, Despite Imperfections

Many of the state’s more established entities, like the casinos and the horse tracks, were given broad leeway to implement sports betting. The state’s most high-profile sporting venues were also permitted to open sportsbooks, a major bonus for America’s leading professional sports leagues.

These gains came at the expense of daily fantasy operators. DraftKings and FanDuel heavily lobbied lawmakers in Springfield to permit these entities, but their entrance in the market were vehemently opposed by the legacy gaming purveyors.

Ultimately, lawmakers reached a compromise: DFS sites, namely DraftKings and FanDuel, could apply for one of the state’s three online licenses, but wouldn’t be able to take bets until 18 months after the first wager was taken by a land-based facility.

During that 18-month period, all online players will need to first register at one of the brick-and-mortar facilities. This is another boon to the land-based gaming operators, who in theory will have additional foot traffic from online registrants who otherwise wouldn’t have entered their property.

This structure also garnered criticism from industry observers. Some gaming backers balked at the base tax rate of 15 percent of total winnings. This is notably higher than the rates set in most other states, which tend to be at 10 percent or less. Further complaints have emerged over data licensing requirements, college betting prohibitions and myriad other caveats of the sweeping bill.

Even the bill’s most ardent backers admit it isn’t perfect, but its still a major development for Illinois and, by extension, the nation as a whole. The measure seemed doomed to fail just a month ago. Now one of the most populated states in the country is poised to take legal sports bets, a move that will have impacts far beyond the Land of Lincoln.