Just before last week’s legislative deadline, state Rep. Bob Rita joined his casino expansion bill to state Rep. Mike Zalewski’s sports betting bill. Rita’s bill, the Riverboat Gambling Act, or SB 516, would add six more casinos to the state, including a land-based property in Chicago. It also would add table games at horseracing tracks and create sweepstakes wagering. Zalewski’s measure, H 3308, the Sports Wagering Act, is important to Governor J.B. Pritzker who included $217 million in sports betting revenue in his proposed state budget.
The strategy proved a winner, with the House passing the bill by an 82-27 margin, the Senate passing it on Sunday and Pritzker signing it. The bill could add as many as 30,000 slot machines to a state that already hosts 12,000 casino slots and more than 30,000 VLTs at bars, restaurants and clubs around the state.
Rita said he believed his bill will pass with the addition of sports betting plus support from the governor and importance of making Illinois’ gambling industry able to compete with neighboring states “We didn’t have sports betting in the past when we were working on trying to put through a piece of legislation. I believe this is a component that actually helps us,” Rita said.
The latest version of Zalewski’s sports betting bill included language to soothe over a controversial “penalty box” issue blocking DraftKings and FanDuel from offering online wagering, in retaliation for running fantasy sports in Illinois despite a 2015 order by former Illinois Attorney General Lisa Madigan stating DFS was unconstitutional.
FanDuel and DraftKings were prepared to launch a $1 million ad attack on Neil Bluhm, owner of Rush Street Gaming, which owns Rivers Casino, and who has promoted the penalty box. But the ads were dropped at Pritzker’s request. It appears the final version of the bill includes a modified version of the penalty box, preventing FanDuel and DraftKings from offering online sports betting for 18 months.
Also, the legislation was amended to allow riverboats to operate a physical sportsbook immediately and to also offer online sports betting but players must apply in person for the first 18 months after the bill is signed. The same provisions would apply to horseracing tracks. In addition, the bill requires licensees to use official data for in-play wagers; requires a $5 million license fee with a 5-year renewable fee of $1 million; taxes sports revenue at 15 percent; and prohibits betting on Illinois collegiate teams.
In addition, the bill has a provision to offer two online-only sports betting licenses at a later to-be-determined date, at a prices of $20 million each.
“It’s also not as much as prohibiting, but just simply again, we’re going to give Illinois casinos a leg up before we go to an online platform,” Zalewski said.
Rita noted, “We’ve been moving some things around trying to make this bill right.”
Regarding adding new casinos to the state’s existing 10 riverboat operations, state Senator Dave Syverson said, “We are running out of time for the state of Illinois. For some of us in locations like Rockford and Danville, we don’t have another year. States will have built and approved massive casinos and will be way ahead of us and taking even more out of Illinois.”
He added a major obstacle has been casinos that “don’t want to see a gaming expansion, those who have monopolies. But enough is enough. There is $1.5 billion leaving Illinois and going to five surrounding states” with casinos. He said it’s urgent that legislation pass to allow a casino in Rockford, considering a tribal casino is moving forward across the state line in Beloit, Wisconsin.
The state’s existing gaming industry is dead set against this massive expansion. Tom Swoik, executive director of the Illinois Casino Gaming Association, told Legal Sports Report that his organization would not support any new casinos.
“I can’t imagine we would be agreeable to a large gaming expansion bill, as we haven’t been in the past,” Swoik said. “We would have to look at it, but right now I’d say a large expansion is still out of the picture for us.”
While Swoik is more positive about the sports betting component, there are still problems with that. He points out the 15 percent tax rate, combined with the federal excise tax of .25 percent, on top of a $5 million or $10 million license fee makes it very difficult to make money. And if available at the 2,500 lottery locations, sports betting would be a losing proposition for Illinois casinos. It’s still unclear what role the lottery will play in sports betting.
One gaming company based in Illinois is pleased with the passage of sports betting. Richard Schwartz, president of Rush Street Interactive, says his company is ready to operate mobile sports wagering.
“Thanks to Governor Pritzker’s leadership, and the weekend overtime hours put in by the General Assembly, we are excited by the legalization of sports betting and the prospect of making history by bringing our innovative and award-winning mobile platform to Illinois. Only two years after entering the New Jersey online market in 2016, Rush Street Interactive’s focus is on delivering what sports betting players want, a massive range of betting options, responsive customer service, and fast payouts. Just this past week we made history in Pennsylvania for being the first to launch an online sportsbook. We look forward to bringing the same top quality, award-winning products and services to players in Illinois where we are headquartered.”
