In-person registration for access to mobile sports wagering and removing the prohibition on wagering on games involving in-state colleges and universities in Illinois were two subjects among a host of gaming issues discussed in the General Assembly’s Executive Committee Wednesday.
The committee, chaired by state Rep. Bob Rita — one of the legislative leaders in gaming for the state and a key driver of the 2019 capital bill that legalized sports wagering in the Land of Lincoln — listened to fellow legislators, lobbyists, and other stakeholders present positions in support and opposition of bills that could eventually be voted on in Springfield before the current session ends in May.
“I thought the HB 849 discussion was substantive and thoughtful, and I’ll continue to work on the proposal with a hope of passing this session,” Rep. Mike Zalewski said in an email to Sports Handle, referring to the bill that would remove the ban on wagering on in-state schools. “As for in-person registration, it remains an ongoing dialogue, but my sense and hope is we can phase it out over a period of time while still respecting the investment brick-and-mortar operators have made into Illinois communities.”
The state has collected more than $31 million in tax receipts from sports wagering through February since operators went live with retail wagering in March 2020 and digital wagering in June 2020, which covers the most recent month of revenue figures released by the Illinois Gaming Board. Operators have generated more than $208 million in revenue from nearly $3 billion in handle since launch.
In-person provision remains sticking point
In-person registration was one of the most contentious parts of bringing sports wagering to Illinois, with brick-and-mortar casinos — most notably Rush Street Gaming via Rivers Casino in Des Plaines — seeking a way to prevent online titans DraftKings and FanDuel from quickly establishing a dominant market share of online wagering. In addition to in-person registration, the Sports Wagering Act included an 18-month waiting period from when the first retail sports betting license was issued to when the first online-only sports betting license could be submitted to the IGB.
Dubbed the “penalty box” provision, both DraftKings and FanDuel bypassed that waiting period during the pandemic by partnering with retail casinos and rebranding them for entry into Illinois. Aided by Gov. JB Pritzker’s Executive Order 2020-41, which suspended in-person registration and allowed bettors to download apps directly to smartphones, both online sportsbooks quickly erased the advantage BetRivers enjoyed from being first to market in mid-June.
DraftKings, which launched Aug. 5, 2020, has cleared $1 billion in online handle. FanDuel, which launched about three weeks later on Aug. 28, outperformed BetRivers in both January and February and could move into second for overall online handle.
Pritzker let Executive Order 2020-41 lapse this month, returning in-person registration to full effect. In-person wagering clearly worked because mobile wagering accounted for more than 96% of the overall handle in Illinois since BetRivers took the first such wagers. The mobile handle has been at least $400 million in each of the last five months and reached a peak of $575.2 million in January.
Trevor Hayes, who is William Hill’s head of government relations, testified that Pritzker’s executive order created a “very good test case for Illinois to see how [remote registration] would work.” He pointed out that William Hill receives 75% of its wagers online, and operators already have responsible-gaming protocols in place that come with online betting.
“There is no need to have the people of Illinois have to drive in order to do the registration,” Hayes said. Remote registration has “been a success and I think it is time to open it up and not wait for the potential of someone applying for the online license in August when we have a number of people in the industry that are participating now, and your consumers are gravitating towards it and it has been a success.”
John Pappas, state advocacy director for IDEA for Growth added that in-person registration is “not essential to a well-regulated market” while calling for its permanent removal. He added that an internal study showed that a “significant percentage of likely sports bettors” would not be willing to drive to open an online sports betting account.
Rita pushed back slightly on Pappas’ first point, recalling in-person registration as “one of the major sticking points” in the final stages of negotiations of the 2019 bill for brick-and-mortar casinos since the expansion also included horse racing tracks to build racinos.
Zalewski: End college betting ban
Today in the House Executive Committee I will present HB849, which removes the prohibition on in state collegiate games – also I’ll discuss suggested changes to Illinois’ sports wagering Act that will make our state’s marketplace more robust. Tune in here: https://t.co/pKzbcRmVqZ
— Michael J. Zalewski (@mjzalewski) April 28, 2021
College sports wagering has accounted for more than 20% of Illinois’ overall handle at nearly $660 million despite bettors not being able to place wagers on football games involving Illinois, Northwestern, and Northern Illinois last season and contests involving the state’s 13 Division I basketball programs. The latter was a point of frustration last month when bettors could not place bets on a second-round intrastate NCAA tournament showdown between the Illini and Loyola of Chicago.
It is estimated the handle for March Madness could have been 15% higher had that game — along with three others involving Illinois and Loyola — been on the board. Still, the IGB reported robust wagering for college basketball’s signature event, noting at least $14.6 million in revenue and $176.8 million in wagers from the tournament were generated, with one operator still to provide figures.
Zalewski, another key legislator when it comes to gaming and sports betting in Illinois, filed HB 0849 in February to remove the prohibition for wagering on in-state teams. He said the prohibition was a necessary piece for passage of the Sports Wagering Act at the time, but in practice, the ban makes “us less of a robust marketplace” as bettors have crossed state lines to Iowa and Indiana to place bets on Illinois schools.
Zalewski also drafted an amendment to his bill that would allow a school to petition the IGB to suspend wagering on that school if a student-athlete was harassed or affected by a sports bet. He presented the amendment as a stick-and-carrot approach.
“If there are, in fact, instances of harassment and a petition is filed, that would both draw the immediate reaction necessary to cease the behavior and then when bettors realize there could no longer be bets,” he said. “It would send out the public-relations signal that there needs to be a better form of behavior.”
University of Illinois Athletic Director Josh Whitman, representing the ADs of the 13 Division I schools in the state, noted his group “remains in strong opposition” to Zalewski’s bill. He cited two primary concerns: the integrity of the game in which student-athletes are “more susceptible to undue influence than professional athletes” since they are among people who could be betting on games; and the mental health and well-being of student-athletes.
Whitman labeled some of the social media interactions “vile,” “abusive,” and “threatening,” with some cases directly referencing gambling losses. He added that while students choose to be part of that environment, “what they haven’t made a choice to do is have somebody lose $1,000 if they miss a free throw or drop a pass and then take really nasty shots at them on social media.”