The Illinois General Assembly’s House Gaming Committee held a subject matter hearing Wednesday regarding potentially expanding sports wagering on games involving in-state schools to include online platforms.
HB 4041, filed by Rep. Jonathan Carroll last Thursday and given its first reading Tuesday before being assigned to the Rules Committee, would allow for mobile sportsbooks to offer pre-game betting — called Tier 1 wagering in Illinois — on the state’s 13 schools that play Division I basketball and seven that compete at the FBS or FCS levels. HB 3136, a bill passed during the 2021 veto session in the previous General Assembly, specified that pre-game wagering could only be done at retail sportsbooks in the state. That provision sunsets on July 1, prompting Carroll’s filing.
Carroll’s bill does not contain any language regarding individual prop bets on players participating in games involving in-state schools. While nearly half the 37 states that have sports wagering prohibit or limit wagering on games involving in-state colleges, there is more strident opposition at the university and NCAA levels regarding individual prop bets, given the social media fury from losing bettors that’s occasionally directed toward athletes.
College sports wagering is a notable draw in Illinois, having generated close to $1.4 billion handle in 2022, with $286 million of that originating from the NCAA men’s and women’s tournaments. Another $386.3 million has been wagered in the first two months of this year.
More than 94% of Illinois’ college sports handle came through mobile platforms last year, and 96% has originated via mobile or online platforms thus far in 2023. Those figures do not include parlay wagers that may include college events as part of the overall bet.
Illinois AD Whitman again leads the opposition
In his opening remarks, Carroll noted that expanding pre-game wagering to mobile platforms has the potential to increase revenue from college wagers by 20%.
According to the Illinois Gaming Board, total revenue from Tier 1 college sports wagering totaled $33.1 million in 2022 from $891.2 million handle, resulting in a 3.7% hold — barely half the industry standard of 7%. Given the fact that Illinois taxes sports wagering at a rate of 15%, realizing that 20% gain from the 2022 revenue total would result in nearly $1 million in tax revenue.
Carroll proposed that some of the tax revenue generated from this expansion could be part of a “revenue-sharing model that through this we offer support for the university for some of the student athletes for mental health.”
“And I think if we’re going to ask if we’re going to have this in place and do something like this, a conversation around providing them resources to help them, especially the revenue made off this, should be something we talk about,” he added.
Though Carroll and University of Illinois Athletic Director Josh Whitman were collegial during the hearing and had discussed aspects of the bill prior to it, Whitman — speaking on behalf of the state’s 13 schools impacted by sports wagering — expressed opposition to the potential expansion. He cited an anecdotal uptick in bullying via social media that has taken place since HB 3136 was passed and echoed Carroll’s point that colleges and universities were getting no support from the state in terms of mitigating the risks to student-athlete mental health.
Whitman also pointed out that two of the largest sports wagering markets in the U.S., New York and New Jersey, have carveouts prohibiting wagering on in-state schools. The 32-page packet of information Whitman and the state’s other athletic directors submitted to the Gaming Committee included an appendix featuring five pages of derogatory and expletive-filled tweets and Instagram posts directed at Illinois and Northwestern athletic programs and players.
“I do think that right now, as a result of where we sit, our athletic programs bear 100 percent of the risk of the decisions that you all are making,” said Whitman, referring to the aftereffects of implementing HB 3136. “By implementing more broad-based and state collegiate sports gambling, the people who are placed at risk are our student-athletes, our university students, and the integrity of our contests.”
That admonishment drew a swift rebuke from one committee member, who pointed out that college athletics in general “pulled themselves into this space. This is something you forced on yourselves with the ad contracts, with the TV contracts, with the big games, with the big stadiums. You guys are looking for that engagement.
“I have very little sympathy for college athletics when we’re looking at cost sharing,” the committee member added, “especially with some of the issues we have with student enrollment and some of the issues with the amount of money in college athletics.”
He went on to say that college athletics are “thriving on the engagement, and gambling is a natural outgrowth of that.”
WNBA’s Sky seek reduction in license fee
The other subject matter hearing for the Gaming Committee Wednesday centered on HB 4042, which would reduce the sports facility sports wagering license fee from $10 million (as originally written in the 2019 gaming expansion bill that legalized sports betting in Illinois) to $3.5 million for venues with a seating capacity of less than 12,000.
Rep. Eva-Dina Delgado authored the bill, with the WNBA’s Chicago Sky a primary supporter. The Sky play at Wintrust Arena, which has a capacity of 10,384 and was deemed eligible for a sports betting license with the passage of HB 3136.
Michael Alter, a key proponent of HB 3136, was joined at Wednesday’s hearing by fellow co-owner Nadia Rawlinson, who said the lower license fee would help the team achieve its goals of financial stability and viability for long-term success. She also pointed out that sports wagering would be a way for the 2021 WNBA champions to give back to the city and state.
“Getting the ability to gain revenue from this sports betting license, having access to it in a way that’s comfortable for us in our business model will be, for lack of a better word, game-changing,” Rawlinson said. “This is the ability for us to diversify our revenue streams. So we’re not just beholden to the vagaries of sponsors and corporate budgets and the weather. We also can rely on this local revenue stream that’s within our control.”
FanDuel‘s parent company, Betfair, submitted an application for a sports facility sports wagering license at the United Center — home to the Bulls and Blackhawks — last September, and that is currently the only application in the queue for that specific license type. DraftKings is expected to submit its application for a similar license at Wrigley Field, having nearly finished construction on a two-story sports betting lounge adjacent to the iconic home of the Cubs.