Slowly but surely, there will be sports betting in the Land of Lincoln come 2020.
The Illinois Gaming Board took another step forward in its Thursday meeting when it announced the availability of the Phase 1 process of the application. Governor J.B. Pritzker signed the sports betting into law last summer as part of a massive casino expansion package, but the state has been slow to move and has fallen behind neighboring states Indiana and Iowa — both of which introduced sports betting during 2019.
βTodayβs release of applications and phase 1 rules is a significant step in the process the General Assembly and Governor Pritzker began earlier this year β the ethical and transparent implementation of sports wagering in Illinois,β said Illinois Gaming Board Administrator Marcus Fruchter. βIGB staff used responses from the comment period to inform the rules and also derived best practices from states where sports wagering is already being conducted in order to develop a regulatory framework and implementation process that are right for Illinois and will protect the public interest.β
Fruchter did not offer a definitive timeline for sports wagering to be available in Illinois, but did note the plan is to roll out Phase 2 of the application process early next year, which “covers the governance of wagering operations, self-exclusion and core issues to be conducted and actualized in 2020.”
Illinois has granted six new casino licenses and authorized up to four horse racetracks to obtain casino licenses. The bill calls for the casinos to be located in downtown Chicago, suburban Cook County, Danville, Rockford, Waukegan, and Williamson County.
$10 mm license fee and much work left
As expected, a sports betting license at sports venues will cost $10 mm, which covers four years, and then can be renewed for a four-year period for $1 mm. There is a sliding scale for licensees covered under the Illinois Horseracing Act of 1975 and issued a license prior to June 28, 2019, with those applicants paying either 5 percent of their 2018 handle or $2,341,231, whichever is greater.
For a sports wagering license to an Owners licensee licensed under the Illinois Gambling Act prior to June 28, 2019, the initial license fee is 5 percent of its adjusted gross receipts from 2018 and not exceed $10 mm. Those licensed after the Illinois Gambling Act who are approved for a sports wagering license must pay an initial license fee of $5 mm or 5 percent of its AGR from its first 12 months of gambling operations, whichever is greater, but not to exceed $10 mm.
While Fruchter acknowledged the slow pace when asked about the availability of sports wagering in the context of the sports calendar with the Super Bowl the first weekend of February and the NCAA Tournament in mid-March as high-profile betting events, the IGB administrator stressed the goal was to make sure the end product best serves the state of Illinois.
“Thereβs not a timeline because we donβt want to set goals and deadlines that are arbitrary,” Fruchter explained. “The goal is to get a sports wagering system that is correct, not a sports wagering process by an artificial deadline.
The important part for us is to follow a deliberate process that preserves the integrity of gaming, preserves transparency and independence of our process and make sure that we have a process that is the right approach for Illinois.”
Fruchter also did not sound worried about losing potential tax revenue to Indiana, which has generated nearly $2.8 mm in tax revenue from sports wagering at a tax rate of 9.5% in the first three months since taking bets.
In comparison, Illinois will have a 15% tax rate, and the three Indiana casinos closest to the Illinois border in the Chicagoland area — Ameristar in East Chicago, Horseshoe Hammond, and Blue Chip in Michigan City — reported a combined sports wagering handle of over $113.2 mm in November according to the Indiana Gaming Commission.
Nearly 78% of that handle ($87.81 mm) came from mobile sports betting, and there will be an 18-month waiting period for mobile-only franchises — most notably FanDuel and DraftKings — to enter the Illinois market after sports wagering goes live. Rush Street Interactive, which has a minority ownership stake in Rivers Casino, is expected to fill that void through its BetRivers app after bettors register in-person at the newly opened BetRivers SportsBar in Des Plaines, which is just outside downtown Chicago and near O’Hare International Airport.
βThe key thing is how sports wagering is going to be conducted in Illinois pursuant to our statute, which is different than Indiana,” Fruchter said. “While we respect our Hoosier neighbors, at the same time, Illinois is a different state and we have to do whatβs in the best interest of Illinois.”
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