The Illinois Legislature is split on a bill that would lower sports betting renewal fees for sportsbook operators.
SB 323 passed 55-1 in the Senate on March 29, but suffered a much bumpier ride in the House. The House Gaming Committee rejected the notion that the bill should lower licensing fee renewals.
When the state passed its initial sports betting legislation in 2019, the fee was set at $150,000 for the first four years. The fee after that is $150,000 annually.
That is where sportsbook operators believe the legislature made a mistake. They have said that the fee is exorbitant.
Chris Nybo, a former State Senator until 2018, is now a lobbyist representing the gaming trade association iDEA Growth. He suggested that the unusually high fee is a drafting area.
Illinois Gaming Control Board Administrator Marcus Fruchter expressed his opposition and was able to sway House committee members. They have voiced their displeasure in regards to lowering the fee.
Rep. Bob Rita, chief sponsor of the 2019 bill and vice chair of the committee, said there was no mistake in the language of the law.
Nybo argued that this must have been a mistake because all other licensing fees for sports wagering, or gaming as a whole in Illinois, either stay the same or decrease upon renewal.
“Beginning 4 years after issuance of the initial supplier license, a holder of a supplier license shall pay a $150,000 annual license fee.”
Nybo argued that this must have been a mistake because all other licensing fees for sports wagering, or gaming as a whole in Illinois, either stay the same or decrease upon renewal. He said it shouldn’t cost companies more money to renew a license that is in good standing with the state.
“The suppliers are the ancillary service providers, the geolocation providers, the payment processors, some of the technology, some of the game content,” Nybo said. “This is not DraftKings or FanDuel. This is not the people holding the operators’ licenses and running the platforms. These are peripheral services to support the infrastructure.”
Even the new fee being considered is too expensive, Nybo said. The new amount would be $50,000 annually, $100,000 less than the current amount. But several states have a renewal rate of $5,000 a year.
Fruchter said sports wagering suppliers would pay far less if the bill is passed.
Rep. Jeff Keicher said he wanted to see how much money the 15 suppliers are making before he makes a decision on the bill.
“The information that I see out there consistently reported is that Illinois has been a bonanza for sports betting,” Keicher said. “They’re making money hand over first, and it’s all online platforms it seems that are out of state, out of area. I think it’s a reasonable fee that helps keep some of those dollars here.”
