Illinois Online Gambling and Daily Fantasy Sports Bills Have a Chance to Pass

Last updated on December 14th, 2021

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The Illinois Senate passed an online gambling bill (SB208) on Wednesday. To pass into law, though, the Illinois House of Representatives and Governor Bruce Rauner have to approve the measure.

Still, Wednesday’s vote is a cause for celebration among online gambling advocates. Illinois’s state legislature is considering an online gambling bill seriously for the first time. Two separate Illinois online gambling bills have proposed amendments to change the online gambling laws.

Most insiders still believe the two bills, SB209 and SB1805, have little chance of passage in 2017. Illinois politics is unpredictable at times and most US states need to make up budget shortfalls, so online gambling legislation might gain support as the summer session reaches adjournment.

In the space below, I discuss all of the bills on the docket, though SB 208/HB 479 appears to be the proposal with the best change of succeeding.

Senate Bill 0208 (HB 479)

Senate Bill 208, also known as House Bill 479, is sponsored by State Senators Kwame Raoul (D-Chicago), Napoleon Harris III (D-Harvey), and Cristina Castro (D-Elgin). The bill amends the Riverboat Gambling Act to provide for license holders to attain an online gambling license, too.

To attain a license, the operator would have to pay a one-time $10 million fee. Operators would receive a rebate on the licensing fee, so their first $10 million in taxes would be considered the fee itself.

The tax rate on gross revenues is 15%. That is a much lower tax rate than the bill passed in Pennsylvania Senate earlier this month, so the operators should receive a windfall from online gambling, if the bill passes.

Senate Bill 1805

SB1805 also attempts to amend the Riverboat Gambling Act. The sponsors of the bill including State Sen. Dave Syverson (R-Rockford) and Sen. Pamela J. Althoff (R-McHenry) in the Illinois Senate. The version of the bill in the Illinois House of Representatives is sponsored by Michael J. Zalewski (D-Riverside).

Senate Bill 1805 involves land-based gambling in the state, but it has provisions which include online gaming. Under SB1805, the Illinois Gaming Board would oversee licensing under this proposal, which has a variety of stipulations designed to help U.S. Armed Services veterans. The Gaming Board would use “good faith affirmative action to recruit, train, and upgrade veterans of service…in all employment classifications”. Licnesees would file an annual report on its use of veteran-owned businessness in the industry.

Daily Fantasy Sports Regulations

Both bills legalize daily fantasy sports. Attorney General Lisa Madigan (D) banned online daily fantasy sports in early 2016, though she suggested the state legislature pass regulations to legalize the hobby once again. SB1805 and SB208 each would make gaming on sites like DraftKings and FanDuel legal in Illinois.

Senate Bill 1667

A third bill, SB1667, is a daily fantasy sports bill. State Sen. William R. Haine (D-Alton) and State Sen. John G. Mulroe (D-Chicago) are the co-sponsors of SB1667. Like SB1805, Rep. Michael J. Zalewski is the sponsor in the House of Representatives.

Update on House Bill 479 (SB208)

On Wednesday, the Illinois Senate approved Senate Bill 208, which sometimes is referred to as House Bill 479 in the Illinois media (and gaming media). The bill passed by a 42-10 margin, suggesting widespread bipartisan support in the Illinois Senate.

Local media believes the negotiations in the House of Representatives are going to be much tougher, so the possibility that the bill passes is going to be smaller. Those people point to the failed daily fantasy sports bill in 2016, which passed easily in the Senate, but failed to pass muster in the House.

Online Poker Compact with Illinois

The gaming media should not overlook the possibilities, if Illinois passes an online poker bill. SB208 allows for the state to negotiate an interstate poker compact, if its regulators so choose. Illinois is one of the “big states”, so its inclusion in any online poker compact would be a game-changer.

If Illinois signed on to the interstate compact between Nevada and Delaware, the player liquidity in the resulting network would increase by several factors. The playing community, selection, and guaranteed prize pools would increase significantly. That, in turn, would mean more players in each state would be likely to register accounts, thus boosting the player liquidity even more.

Possibilities for Interstate Poker Compact

An Illinois-Nevada-Delaware compact might convince New Jersey to join the compact itself, because Illinois would give the Division of Gaming Enforcement a boost to its efforts. If such a combine gathered momentum, revenues would increase and states like Pennsylvania and California might pass online gambling legislation.

In short, Illinois’s Senate vote on Wednesday might be the spark needed to start momentum towards a significant, highly profitable online poker compact.