Illinois Prepares to Legalize Sports Betting
The Prairie State is looking to join a growing list of states that have legalized sports betting since the overturning of PASPA last May. With a large contingency of sports betting supporters, including Governor Pritzker, Illinois is on the cusp of making this dream a reality. Lawmakers want to harness the tax revenue from legalizing the activity rather than let it go to offshore companies and illegal bookies. However, there are still some issues to sort out before Illinois can benefit from this industry.
Still Some Legal Issues to Sort out
Legal hurdles are still present, so that means sports gambling won’t arrive in Illinois for some time. Legislators must consider:
- Where sports betting should take place
- If sports betting should be limited to physical locations or allow for online betting
- How much to tax bettors
Furthermore, lawmakers will have to decide which operators will be allowed one of the limited number of licenses. As of now, a variety of potential operators ranging from racetracks and casinos to video gaming terminal operators have already shown intense interest. This doesn’t make it any easier for Illinois lawmakers to make their decisions.
Chris Grove, the managing director of sports betting for research and consulting firm Eilers & Krejcik Gaming, believes that Illinois could potentially face some troubles with all of the interested parties trying to get on the same page:
“The big obstacle in many states, including Illinois: You have a wide array of stakeholders who want in on sports betting, but may have conflicting visions for how regulated sports betting might look.”
Governor Pritzker’s Proposal
No sports betting legislation has been introduced as of yet, but Governor Pritzker has a plan that calls for 20 licenses for online or in-person sports betting to be sold at $10 million each. The plan also figures in a 20 percent tax rate on the gross wagering revenue of sportsbooks’, which would bring in between $77 million and $136 million as tax revenue to Illinois.
The governor’s spokesperson Jordan Abudayyeh sent out an email stating:
“The governor looks forward to working with lawmakers to begin regulating sports betting, after the Supreme Court decision allowed other states to capitalize on what is currently happening on the black market.”
Potential Revenue from Sports Betting
If they do it right, Grove says, sports gambling could generate for the state $762 million in annual wagers, levy the consumer demand, and turn around declining revenues at all 10 of the state’s riverboat casinos.
Grove went on to say that the legal sports gambling market in the United States could exceed $1 billion as soon as this year depending on when and how many other states get into the action of legal sports betting.
One essential factor in how much revenue the state could make is if the state allows online betting. In states where online betting is now legal, online betting is a full two-thirds of the sports betting revenue. Grove determined that if Illinois didn’t include online sports gambling, projected yearly gross sports betting revenue would go from $762 million to $333 million.
Illegal sports betting in the United States is a multibillion-dollar industry, carried out through old-school illegal bookies or offshore online platforms. Analyst Grove says it shouldn’t be too hard to get Illinois sports bettors to switch from illegal means to legal sports betting as long as the state offers online betting and a reasonable tax rate.
Churchill Downs Could Be a Big Player
The Louisville casino and racetrack owner Churchill Downs has a huge interest in legalized sports betting. Last week, Churchill Downs received approval from the Illinois Gaming Board to buy a 62 percent stake in Rivers Casino for $407 million. That sale should go through this week.
Should sports betting be legalized, it would be a fantastic benefit to many properties like the Des Plaines casino. In an email sent out by Churchill Downs’ CEO Bill Carstanjen:
“Legalized sports betting would certainly be beneficial to Rivers and something the customers would very much want.”
Churchill Dows is just one of several major gambling entities that will rush to Illinois in order to capitalize on a potentially lucrative sports betting and gambling venture.
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