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Illinois is one step away from legal sports betting after a last-ditch effort from Rep. Bob Rita fell into place this weekend.
House lawmakers voted to approve a broad expansion of gambling within a capital funding bill on Saturday, and the Senate followed suit on Sunday. Gaming provisions within the act include a long-awaited casino in Chicago and authorization for both retail and online sports betting.
The bill now moves to the desk of Gov. J.B. Pritzker, whose recent comments make it clear he’ll sign it into law. The governor helped shepherd IL sports betting across the finish line, seeking to drive more than $200 million in additional revenue to his state.
Passage was, frankly, a remarkable feat considering the lack of progress through the first five months of the year. Previous proposals from Rep. Mike Zalewski were all turned aside, and a perceived conflict of interest forced him to step back in the final days of session.
LSR has been keeping a close eye on the chatter this weekend and updating this page as the situation unfolded. Here’s the play-by-play:
The Senate finally takes the floor after 4 p.m. local time. It does not take long.
Sen. Terry Link presents the terms of the amended bill, which carries a total projected fiscal impact of $12 billion. Commendations and favorable comments from Sen. Dave Syverson, the Senate Minority Leader, seem to signal that passage is a certainty.
Comments are brief and mostly surface-level, with a couple lawmakers poking around at narrow provisions that affect their constituents. Sen. John Curran is the only one who speaks to sports betting at any length, seeking clarification on the branding provisions for online platforms.
Link is emotional as he closes the proceedings, reflecting on his 20-year effort to increase economic development from manufacturing.
The chamber applauds as the board lights up green, and the Senate concurs with the House changes by a 46-10 vote. Just like that, the bill that will legalize sports betting in Illinois is headed to the governor.
Here’s the full text of the language:[pdf-embedder url=”https://www.legalsportsreport.com/wp-content/uploads/2019/05/10100SB0690ham003.pdf”]
The new vertical funding bill includes a multi-faceted gambling package headlined by a mega-casino in Chicago. The measure also offers six categories of licensure for IL sports betting:
In plain terms, these categories allow casinos, race tracks, and sports venues to offer sports betting — both in-person and online. The provisions that concern online betting, however, require in-person registration for the first 18 months.
The amendment also authorizes a lottery implementation encompassing 2,500 locations in the first year.
The fee for a master sports betting license is calculated based on gross gaming revenue from the previous year. Casinos will pay 5% of that number to offer sports betting for four years, up to a maximum of $10 million. That cap was not present in recent versions and should ease the burden on large operators like Rush Street Gaming. Rita also softened the proposed tax rate down to 15% of revenue.
As you can infer from the categories, language mandating the use of official league data for props and in-play betting stuck. While there is no integrity fee, the bill does empower colleges and sports leagues to restrict the types of available wagers. As written, in-state collegiate sports are completely off the board in Illinois.
The amendment removes the total blackout period for online betting that snuck into an earlier version, but it does retain a modified penalty box for DraftKings and FanDuel. Daily fantasy sports companies will be allowed to compete in the sports betting arena, but only master licensees can offer online wagering for the first 18 months.
The amendment also creates three online-only licenses costing $20 million apiece, awarded on a delay via a competitive process.
About three hours into the weekend session, we’re still in a holding pattern. House lawmakers have ticked several more items off their to-do list today, including a bill that raises the minimum salary for Illinois teachers. For now, though, there’s nothing new to report on sports betting.
Apart from the things we’re already touched on, a couple other hurdles have cropped up.
Perhaps most notably, Chicago Mayor Lori Lightfoot publicly opposes the bill as written. Her main concern is the provision allowing sportsbooks inside of stadiums and arenas.
Here’s the statement from Mayor Lightfoot, as reported by Capitol Fax:
“I strongly support a gaming bill that directs a new casino and dollars to the city of Chicago. However, I oppose the inclusion of a provision that would open up sports wagering in venues like Soldier Field. Such a proposal has the potential to undermine the viability of any Chicago-based casino through the diversion of customers and revenue from a casino. Because the impact of sports wagering in stadiums has not been fully vetted or analyzed, I cannot support the bill in its current form and urge the deletion of this stadium-betting provision.”
On Saturday, however, the governor releases a follow-up statement indicating that the conversation is still moving forward:
“I have spoken to Mayor Lightfoot about her concerns with regards to sports betting, and we have collaboratively worked with the bill sponsors to make clear that the legislative intent will reflect that there are limits on both the number of and locations for sports betting venues. I’m pleased that we have reached this understanding…”
Mayor Lightfoot subsequently drops her opposition via another statement:
“After productive discussions with the Governor, we have agreed to allow a limited amount of betting at sports venues subject to local oversight and control. These enhancements to the gaming proposal will allow us to maximize revenue capabilities of a new casino for the City of Chicago and ensure a good quality of life for our neighborhoods that might otherwise be affected. As such, I urge the passage of SB 690 as amended…”
After a break for committee meetings and caucuses, Rep Bob Rita files a final amendment to the funding package. The sports betting language looks mostly unchanged at a glance, though there are a lot of words to get through. The bill is called for second reading around 6 p.m. local time and moved straight to third.
By that point, it is apparent that House lawmakers have reached an agreement to pass a number of big bills — including this one — before the end of the night. The floor presentation becomes something of a victory lap for Rita, with several members commending him for his broad efforts to shore up vertical infrastructure. In his closing, Rita thanks Rep. Mike Zalewski for his work.
The House votes 87-27 in favor of passage, sending the bill back to the chamber of origin for concurrence. The Senate meets Sunday at 3 p.m.
Friday was frantic in the state capitol, with a myriad of key issues to hammer out on the last day of the scheduled session. Lawmakers did make a dent in the pile of bills, but leaders were forced to issue a bad-news bulletin extending the work week through Sunday.
Although sports betting remains unresolved, a substantial effort has materialized.
Rep. Robert Rita grabbed the reins on Friday, borrowing from the framework of Rep. Mike Zalewski to cobble together a compromise bill. His effort ran out of daylight on the House floor, but the bonus weekend of lawmaking means there’s still hope for sports betting this year.
While there is some momentum, failure to cast a vote on Friday makes the task a little bit taller. Any bills considered from here on out require a 3/5ths supermajority to pass, a threshold that may simply be out of reach.
Here’s a chronological timeline of the day’s events:
Lawmakers begin the day behind closed doors, working to finalize the framework for IL sports betting. Most presume S 516 will serve as the vehicle, a Chicago casino bill that appears to be a suitable target for the enabling language. A midday curveball, however, shifts the focus.
Joe Ostrowski is a Chicago radio anchor who’s had his ear to the ground this week, and he’s the first to reveal that everyone is looking in the wrong place.
Some optimism in Springfield for sports betting.
SB 690 should drop very soon.
— Joe Ostrowski (@JoeO670) May 31, 2019
The bill he references (S 690) is not a gambling bill, but a measure amending tax provisions in the Invest in Kids Act. The current version has already cleared the Senate and awaits a floor vote in the lower chamber. Suddenly, some expect House lawmakers to file a new amendment related to sports betting.
Sure enough, a placeholder pops up on the docket, with a hearing in the House Executive committee scheduled for 1:30 p.m. local time. A change of sponsor to Sen. Terry Link provides another indication that something is about to happen.
LSR sources indicate that there is good reason to monitor the conversation all the way up until the last gavel.
Sen. Link presents the amended bill to the committee, and … boy, is there a lot in it.
In addition to the gambling provisions, it also touches on taxes for cigarettes, parking, video lottery terminals, and a number of other mechanisms to increase state revenue. The total fiscal impact is close to $1 billion, with sports betting representing just a tiny component of the package.
It is the quickest of hearings, over in less than five minutes. One member inquires whether or not the bill increases the number of slot machines for each casino licensee — it does — and that’s about it.
A heated floor debate on a marijuana bill (which ultimately passed) delays the House hearing by several hours.
When the committee finally convenes, Rep. Mike Zalewski is a surprise addition to the dais at the front of the room. Although the long-suffering proponent of IL sports betting recently stepped back from the spotlight, Rita’s bill still lists him as the primary House sponsor. The committee substitutes Zalewski in as a temporary member to cast a vote in favor of passage.
Without much lead time, the amendment attracts 34 proponents and nine opponents (which later grows to 18). Casino groups including Boyd Gaming, Penn National Gaming, and the Illinois Casino Association remain opposed to the final language.
Members of the committee have plenty of questions, but the bulk of the conversation centers around gaming provisions not related to sports betting. Rita struggles to explain some of the finer points in detail, particularly as they relate to DraftKings and FanDuel. It’s complicated.
The language allows online platforms, but online-only companies can not seek licensure for the first 18 months of IL sports betting. The sponsor indicates he constructed his bill this way to “give Illinois companies a ramp” into the new industry. Rita also notes that his amendment will not affect the existing status quo for DFS.
The committee recommends adoption of the amendment by an 8-5 vote, advancing the bill to the floor. There is still a lot of work left to do before adjournment, both on sports betting and on a number of pivotal issues — including the state budget.
This year’s attempt to legalize sports betting follows in the footsteps of the failed 2018 effort.
As it did last year, work began early in 2019. Lawmakers cobbled together a variety of possible frameworks, each catering to a particular group of stakeholders. Once again, however, nothing broadly palatable had emerged as the last few hours of session ticked off the clock.
The proposed budget from Gov. J.B. Pritzker includes $217 million in revenue from sports betting, so there’s more at stake than just the freedom to wager. Failure would force Illinois to watch from the sidelines while its neighbors in Indiana and Iowa activate their new laws.
The concept of the “penalty box” is the biggest hurdle to a passage at the moment.
To make a long story short, some casino groups are working to keep DraftKings Sportsbook and FanDuel Sportsbook out of the Illinois market. They argue that daily fantasy sports is not explicitly legal in the state, and these so-called bad actors should be excluded from licensure for three years. The real motivation is, of course, a desire to eliminate competition from the two companies running away with the New Jersey sports betting market.
DraftKings responded by briefly running a television campaign pushing back on the obstruction from Rush Street Gaming.
The sports leagues have also gained more leverage with Illinois lawmakers than they have elsewhere in the country.
Most previous proposals for IL sports betting required payment of an integrity fee and the use of official league data to settle “Tier 2” wagers. No US sports betting law includes an integrity fee, and Tennessee is the only one that has a data mandate.
Coupled with licensing fees topping out at $25 million and taxes amounting to 20% of revenue, these operational burdens may stand between the bill and the finish line.
Rep. Mike Zalewski carried the baton all spring, but a lack of progress and a perceived conflict of interest forced him to step aside in the 11th hour.
Start-of-day intel indicates that Rep. Bob Rita is actively working to stuff the enabling language into the broader gambling package before lawmakers head home for the year. In what could be seen as an encouraging sign, Senate Republican Leader Sen. Dave Syverson has signed on as a co-sponsor.
There’s no guarantee that bill passes, though, and it may not include sports betting provisions even if it does.
Matt Kredell contributed to this story.