How Far is Illinois from Online Casino Legalization?

Gambling is broadly welcomed in Illinois

Illinois is home to online sports betting and racetrack betting, as well as a lucrative land-based casino market. However, for the time being, online casino betting for real money is off the cards. The state is making moves to build on the $1.76 billion it garnered in gambling-based tax revenues last year and is now attempting to legalize mobile gambling as well. Illinois is not the first state to attempt this, but will its efforts be any more successful than those of New York and Maryland, which appear to have stalled despite the success of online sports betting?

Right now, online casino gambling is only legal in a handful of states, despite brick-and-mortar casino gambling being available much more widely.  The state has invested heavily in gambling, with 16 casinos and authorized slot machines at restaurants, bars, and truck stops. The next logical step would surely be to legalize iGaming. That is precisely what Rep Edgar Gonzalez and Sen Cristina Castro are hoping to achieve with their Internet Gaming Act.

What will the legislation achieve?

The pro-gambling duo claims that authorizing online casino gambling on mobile devices could generate over $1 billion. The act would allow Illinois’s casinos to expand their current operations online. This would allow residents to play online slots, poker, roulette, and other popular casino games on their mobile devices. There is ample evidence to support claims that the state is losing out on untaxed revenues that are currently lost as gamblers wager on offshore and illegal operators’ platforms. The move would also introduce a 25% tax incentive for the sector, which could be used to create thousands of new jobs in online casino-related roles.

Online casino games are already legal via social and sweepstakes casinos

While the bill is not without its detractors, it is important to acknowledge that online casinos are already popular in the state. While real-money ones might have to operate offshore, sweepstakes casinos are increasingly popular in Illinois and right across the US. They are covered by entirely different legislation. Unlike real money casinos, they are subject to sweepstakes laws rather than gambling legislation. This is because they do not meet the three criteria of Prize, Chance, and Consideration that define gambling in US law.

It is because sweepstakes do not meet the Consideration criteria that they are permissible. The operators provide players with a free means to participate. This is typically achieved through generous bonuses awarded to players for logging in daily or by clicking on links on social media sites. The bonuses are in the form of virtual currencies, which allows sweepstakes casinos to be classified as legal promotions rather than gambling sites.

In addition, to differentiate them further from their real-money equivalents, they have a virtual money system with Gold Coins and Sweeps Coins. Gold Coins are the currency that is distributed freely, while Sweeps Coins can be won and traded for real prizes. A casino review site like Casino.org ranks the most popular sweepstakes casinos and identifies the best ones for players. As they do not involve gambling for real money, there is no need for a gambling license, but they are governed by US sweepstakes laws, which require a no-purchase entry method and adherence to age restrictions in each state.

Opposition to online casino gambling.

It may come as no surprise that neither real money nor sweepstakes online casino gambling is welcomed by everyone. Some opponents cite concerns about player safety, while others are primarily concerned about competition and their own financial interests.  There is a concern that legalizing mobile gambling could negatively affect small businesses, bars, and restaurants that are heavily dependent on the in-person gaming machines they rely on for extra revenue. Opponents have warned that the new law could lead to a rapid decline in foot traffic to these venues, which could have a knock-on effect on the broader economy as small businesses continue to struggle.

There are currently nearly 49,000 video gaming terminals in venues across the state. If people are only going to the venues to play, the impact of the bill could be devastating. Those in favor would argue that, as people are already playing online at offshore and sweepstakes online casinos, the impact would be only marginal.

Lawmakers have cited recent studies conducted in New Jersey, which found that online gamblers have been flocking to brick-and-mortar venues in increasing numbers rather than decreasing ones. This then feeds into the second concern, which is about the risk of vulnerable people being affected by gambling harms. While most people can gamble safely and treat it like any other form of entertainment, there is a small sub-sector that becomes addicted and can be harmed by gambling.

Preventing gambling harms

When it comes to reducing potential gambling harm, the choices are to prohibit or manage the situation. The evidence across the country suggests that prohibition is ineffective. If people want to gamble, they will find a way to do it. Those in favor of legalizing mobile casino gambling in Illinois argue in favor of tighter regulation to prevent gambling harm and for money to be set aside for education and prevention programs.

A divided market – the odds are fifty/fifty

The operators themselves are not of one opinion either. While you might expect all of them to welcome the proposed legislation, companies like Penn Entertainment are concerned that it could compromise the hundreds of millions of dollars they have invested in physical venues in the state. If people can play from home or on the go, will they still turn up for in-person gambling?

The Gaming Boards of each state are also concerned that they lack the necessary resources that would be needed to oversee the expansion of this state-wide gambling roll-out. Unlike other states and countries, there is a fear that the market is reaching saturation point, and it is hard to tell whether more gambling will bring the expected benefits or just cannibalize existing markets.

However, if Illinois’ legislators manage to utilize the Internet Gaming Act to recoup tax revenues lost to out-of-state gambling platforms, the bill could return money to state coffers that would otherwise be lost.  Whether the future of the bill is decided within the current legislative session remains to be seen; for now, all bets are off.