Illinois could realize hundreds of millions of dollars in new revenue for the state if a bill to legalize online gambling, online poker and daily fantasy sports passes, according to a new white paper.
Immediate revenue for Illinois from iGaming, DFS
The revenue projections from gaming analyst Chris Grove lay out the potential of a gaming package being considered by the Illinois legislature. The bill has already passed the Senate, and is awaiting action in the House.
State benefits from iGaming, DFS
The legalization of online gambling would create an immediate infusion of more than $100 million for the state, which has struggled to pass a budget in recent years. DFS legalization would create a fraction of the revenue but would nonetheless create several million in new revenue annually.
Here’s the estimate of what Illinois would realize, if the bill is enacted as is:
The lump sum up front is an offset against future taxes paid. But the report notes that tax revenue will start flowing after year two:
While the tax prepayment will obviously curtail near-term tax revenue, it won’t take long before Illinois is seeing a steady stream of tax revenue, primarily generated by regulated online gambling. New tax revenue will begin to flow in year three, and by year four Illinois will be taking in over $50 million annually from regulation of online gambling, along with another $4.5 million from daily fantasy sports.
See the full report here.
Revenue for iGaming, DFS operators
The opportunity for potential online gambling licensees — including casinos and racetracks — is a big one. Here are the report’s gross revenue estimates if the bill becomes law:
The current status of iGaming, DFS in Illinois
Online gambling is illegal in Illinois. However, a variety of illegal offshore sites offer online gambling, poker and sports betting to users in the US, Illinois included. Regulated online gambling should help curtail the black market for gambling in the state. It would also give Illinois residents a safer alternative.
DFS, meanwhile, resides in a legally murky area, as things stands. While DraftKings and FanDuel operate in the state, they do despite a negative attorney general opinion dating back to 2015, saying DFS is illegal gambling under state law.
New Jersey, Nevada offer arguments for legalization
Some fear online gambling legalization as something that could upset the balance for gaming in any state, Illinois included.
But the report notes the examples of New Jersey and Nevada. Those states paint a picture that online gambling is good for brock-and-mortar gaming.
The legalization of online gambling in NJ has helped Atlantic City turn around a decade-long gaming revenue slide.
And Nevada sports betting has grown alongside the introduction of web and mobile sports betting in the state. From the report:
As more and more properties embraced mobile sports betting, revenue continued to rise. There is little reason to believe that mobile sports betting has had anything but a complementary effect on total sports betting revenue in Nevada.
Here is the picture for Nevada sportsbook revenue:
All of that points to the idea that regulation of online gambling is a good thing for land-based gaming in a state, not a hindrance.