The Illinois Lottery remains the state’s main source of gambling revenue but video terminals are closing in on the lottery’s top spot, according to a report by the Illinois Commission on Government Forecasting and Accountability, a bipartisan group that provides economic analysis for the state legislature.
“Ever since its inception, video gaming in Illinois has been on an upward trend,” the report said. Currently more than 45,000 video gaming terminals operate in Illinois.
In the fiscal year ending June 30, the state collected a record of nearly $2 billion in gaming tax revenue. Video gambling machines, found in casinos, bars, restaurants, truck stops and convenience stores, made up 41 percent of that total, up 6.8 percent to $814 million. The lottery made up 44 percent, an increase of 4.7 percent to $872 million.
Lucy Dadayan, principal research associate at the Urban Institute Tax Policy Center, said gaming revenue in Illinois could continue to grow but that depends more on new casino openings and increasing numbers of video terminals than the amount wagered on average at each site. She noted Bally’s Corporation recently opened a temporary casino in Chicago, and Circa Sports launched its mobile app in Illinois and a retail sportsbook in suburban Waukegan. Legalized in Illinois three years ago, sports betting tax revenue has grown from $7 million in fiscal 2020 to $143 million in the latest fiscal year.
Josh Goodman, a researcher at the Pew Charitable Trust, said as gambling options increase within Illinois and in nearby states such as Indiana and Wisconsin, wagering revenue may not continue to grow as it has in the past. He noted in fiscal 2023, Illinois gaming tax revenue provided less than 5 percent of the state’s general fund revenue.
Goodman cautioned state governments to avoid depending on gambling revenue for ongoing expenditures like salaries. Fiscal watchdog group Civic Federation Acting President Sarah Wetmore added casinos and other gaming options “are not a sustainable and reliable source of revenue. They go up and down with the economy.”
