Intense Weeks in Illinois: Online Casino Legalization Fails While Senate Approves Higher Sports Betting Taxes
Efforts to legalize online casinos in Illinois have once again encountered a roadblock. Two proposals, House Bill 2239 by State Rep. Edgar Gonzalez Jr. and Senate Bill 1565 by State Sen. Cristina Castro, failed to move beyond committee discussions. These setbacks mean that any progress on legalizing online casinos will be deferred until the next legislative session in January 2025.
Proposed Framework and Challenges
The proposed bills aimed to create a regulatory framework for online casinos, suggesting a 15% tax on the revenue generated.
Proponents highlighted the potential financial benefits for Illinois, especially given the state’s budgetary challenges. Despite these arguments, the bills did not gain sufficient support to advance to a full legislative vote.
One of the main concerns raised by opponents is the potential negative impact on existing brick-and-mortar casinos. While studies from states like Michigan suggest that online gaming can coexist with traditional casinos without reducing their revenue, Illinois’ physical casinos remain cautious.
They fear that the introduction of online gaming could disrupt their operations and financial stability.
New Graduated Sports Betting Tax Approved
In contrast to the stalled iGaming initiatives, Illinois legislators have approved a significant change to the state’s sports betting tax structure.
House Bill 4951, now awaiting Governor J.B. Pritzker’s signature, proposes a new graduated tax system that increases rates based on revenue.
Under the new system:
- The first $30 million in adjusted gross revenue (AGR) will be taxed at 20%.
- Revenue from $30 million to $50 million will be taxed at 25%.
- Revenue from $50 million to $100 million will be taxed at 30%.
- Revenue from $100 million to $200 million will be taxed at 35%.
- Revenue above $200 million will be taxed at 40%.
This change makes Illinois’ sports betting tax one of the highest in the United States, second only to New York’s 51%.
The sports betting industry has expressed concern over the new tax structure. Jeremy Kudon, president of the Sports Betting Alliance, warned that the higher taxes could harm the industry.
Kudon argued that increasing the tax rate would penalize operators who have invested heavily in the state and created jobs, potentially driving business away from Illinois.
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