USA sports betting

Welcoming Illinois

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It is finally official. After a long process with many ups and downs, the state of Illinois has officially brought legal sports betting to the state. In the capital city of Springfield, Governor J.B. Pritzker signed the bill legalising sports betting in the the prairie state. This makes Illinois the fifth state in 2019 to do so and the largest one by population. The other four including Iowa, Montana, Tennessee and Indiana. 

The bill was passed on the back of a more accepted ‘gaming expansion’ capital proposal. Without the attached gaming expansion, the bill stood no chance of being passed. This was made loud and clear when in April 25 senators had sent letters to the Governor stating that they would not support a standalone bill legalising sports betting.

The week leading up to the bill’s passage was filled with more controversy as the mayor of Chicago voiced her opposition. However, Pritzker was able to sway the mayor’s decision with assurances that the city would have total control over what the stadiums could and couldn’t offer. The combined bill passed in the house with an 87-27 vote and the next day in the senate with a vote of 46-10. 

With the combination of the two bills, some significant changes were made to the original sports betting proposal. The amount that casinos could pay for an initial license was capped at $10 million and the tax rate was lowered to 15%. These changes are intended strictly to help the casinos. With the gaming expansion, current casinos could stand to lose more from increased competition than they could gain from the legalising of sports betting. 

The biggest change made in the final proposal was that bettors must sign up for online betting accounts in-person. This is only necessary until online-only licenses are granted, which is at least 18 months away. This change has been immensely unpopular with both casinos and potential players.

Tom Swoik, Executive Director of the Illinois Gaming Association, indicated that none of the nine casinos in the Illinois Gaming Association wanted in-person registration. Rivers Casino supported the the new requirement but themselves did not ask for it in their own proposal. There is a similar rule in place regarding the mobile aspect of the business and in-person registration in both Iowa and Indiana. 

The final draft was also disliked by Boyd Gaming and Penn National Gaming. The problem was that the tax rate and price of the initial licensing fee. Swoik stated that the tax rates and licensing fees were much lower in Iowa and Indiana. Due to this, both of these states could offer their patrons better odds than Illinois could. The real measurement of success for the bill will be how the odds and revenue stack up when compared to states like New Jersey and Pennsylvania.  

The requirement for in-person registration is due to the fear that sports betting giants DraftKings and FanDuel will immediately accumulate a large percentage of the business. A valid concern, as gaming company Rush Street Interactive claimed that the two companies had been illegally operating their fantasy businesses in the state and believed they should not be rewarded for this. 

Representative Bob Rita, the man who put the final proposal together, came up with a solution to at least temporarily combat this potential issue with what he thought would work best for the state of Illinois and its businesses. Rita’s solution states that both DraftKings and FanDuel will both be able to participate from the beginning, but only as partners to casinos operating under their own brand. 

FanDuel and DraftKings, along with other mobile betting companies, can apply for online-only licenses available each for $20 million. Thus, for players to be able to register and play with strictly online betting companies they must embrace the 18 month wait. It is likely that companies like FanDuel and DraftKings will purchase the license immediately after the waiting period. 

With Illinois’ neighbors Iowa and Indiana legalising sports betting earlier in the year, there was certainly pressure on Illinois to do the same thing. However, it is unlikely that Illinois will be able to launch operations before those other two. The likely opening for the state is in early 2020, with the primary target to be operational before the Super Bowl on February 2nd. 

As state legislative sessions begin to wind down along with 2019, we now have 15 states with legal sports betting. Seven of these states are currently offering and accepting bets whereas the other eight including Washington D.C. are still waiting to start their operations. Kindred predicts that California and another 20 states will follow suit in 2020 or later.