The 25th-largest state in America that achieved its statehood in 1818 encompasses the Midwest Region of the United States. It borders Wisconsin to the north, Michigan to the north-east, Indiana to the east, Kentucky to the south, Missouri to the south-west, and Iowa to the west.
Illinois is renowned for its progressive nature.
It was the first state to ratify the 13th amendment and abolishment of slavery. It is home to the term jazz, to the first American city to use electric lightning (Aurora), and the first all-color TV Station in the world (Chicago’s WMAQ-TV Channel 5). The only river in the world with the artificially reversed flow runs through the Prairie State (Chicago River flows upwards) that also nurtured four American presidents — Lincoln, Grant, Reagan, Obama.
Not surprisingly, the state economy is one of the most diversified in America. Agriculture, manufacturing, trade, transportation, energy, financial/business services, education, and health verticals contributed to a gross product close to $865 billion in 2018. It equaled 4.2% of the United States’ overall GDP — fifth in the country, trailing only California, Texas, New York, and Florida.
Similarly…
…the Lincoln State and gambling regulations go hand in hand for almost 100 years.
Wagering on horse races was legalized in 1927, the lottery in 1974, bingo in 1983, brick-and-mortar casinos in 1991, and video lottery in 2012.
The latest addition came in 2019 when state legislators enacted the Sports Wagering Act (SWA) that paved the way for legalized land-based and online sports betting.
Legal Framework
In general, the interactive gambling market in Illinois is only partially regulated. Lottery and horse racing products are legal, while interactive poker and online casinos remain not expressly addressed (except for the prohibition of onshore commercial operators).
Other than sports betting, the SWA also expands the envelope of other gaming regulations and brings changes to the Illinois Horse Racing Act of 1975, Riverboat Gambling Act 1990, and Video Gaming Act 2009 (electronic gambling games: slot machines and VGTs).
On the other hand, the SWA stipulates that patrons cannot place wagers on the minor league or K-12 sports events and any Illinois collegiate team.
The state gambling age limits are 18 (for the lottery, pari-mutuel betting, and bingo) and 21 years of age (for casino games, gaming machines, and sports betting).
State taxes vary depending on the product.
Riverboat casinos pay graduated tax rates ranging from 15% to 50% gross gaming revenue; bingo, charitable games, and pull tab-and-jar games are levied at 5% GGR.
Players in riverboat casinos are subject to admission tax between $2-3 per person, in addition to income tax on the gambling winnings of 25%.
The SWA slightly increases operators’ taxes in other gaming verticals while stipulating a 15% tax on the adjusted gross sports wagering revenues (plus an additional 2% on wagers placed in Cook Country).
Speaking of state revenues from sports betting — initial estimations are in the range of $58 million annually already pre-funneled to helping public infrastructure projects, universities, affordable housing, and hospitals.
Licensing
There are two regulators governing gambling environment in the state, Illinois Gaming Board (IGB) and Illinois Casino Gaming Association; sports betting falls under the purview of the former.
It is worth mentioning that although the SWA legalizes all forms of sports wagering, the work on the full operational framework — which also includes licensing — is still in the process.
Furthermore…
…sportsbooks’ licensing seems to be limited to existing holders of a land-based casino and racetrack licenses, and to sports venues that hold 17,000 people or more.
After initial consultations with the public and industry operators in the second half of 2019, the IGB began issuing temporary permits for operations in December under a set of emergency rules. Still, at this point, it is not clear when the process will conclude.
Be it as it is, the SWA introduces several types of licenses:
- Master sports wagering license, organization licensee
- Master sports wagering license, owner’s licensee
- Master sports wagering license, a sports facility
- Master sports wagering license, a sports wagering operator
- Supplier license
- Management service provider license
- Tier 2 official league Data Provider License
- Central system provider license
The IGB issues the majority of permits on four years period, renewable for an additional four. License fees range between “5% of the licensee’s handle from the preceding calendar year” and $5 million, but they cannot exceed $10 million. The renewal fees are $1 million.
The only exception to this rule is the Data Provider License with a 3-year timeframe and variable fees depending on the amount of data sold.
All individual applicants must be over 21 years of age without previous felony history or any violation of the Criminal Code, including “a crime involving dishonesty or more turpitude.”
Additionally, all applicants have to demonstrate the necessary level of skills and knowledge, while operators have to meet Board standards for the license.
Players’ Protection
The IGB utilizes the full umbrella of responsible gambling initiatives in line with policies and guidelines from the Code of Conduct for Responsible Gambling of the American Gaming Association.
The programs comprise of self-exclusion, the designated helpline, Gamblers Anonymous, Gem-Anon, and GemTalk (moderated online peer support forum). Additionally, the Illinois Council on Problem Gambling provides professional counseling services, among other available support channels.
The SWA only underlines such orientation in the sports betting area.
The new law includes a purpose-made hotline or “other methods of communication for anonymous reports of prohibited conduct.” It also expands existing self-exclusion programs to any resident or non-resident sports bettor.
Once a year, the conduct of all parties involved will be subject to the IGB report on sports wagering conduct prepared for Illinois General Assembly.
Additionally, in a preemptive segment of the SWA, the language particularly states that “nothing in the Act shall be deemed to diminish the rights, privileges, or remedies of a person under any other federal or state law, rule, or regulation.”
Final Notes
It might be safe to assume that the full picture of the outcome of the latest legalization efforts will become more apparent in 2020. In no small part, it will depend on how quickly operators embrace the licensing process, as well as on future operational framework addendums that will surely fine-tune all details.
Hopefully…
…these developments will, in time, provide the stepping stone for additional regulations of the whole spectrum of online gambling, which would be entirely in line with the progressive nature of Illinois and could offer supplementary financial resources for the state budget revenues.
One way or the other, with the enrollment of the SWA, we’re looking forward to yet another legalized land-based and online sports betting market in the United States that gives plenty of new possibilities for good fun in Illinois.
To that end, have good luck and enjoy it!
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