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Read Full BioIllinois lawmakers have introduced legislation that proposes to legalize online casinos in the state. The bill would allow existing gambling license holders, including casinos and racetracks, and their partners to operate up to three branded platforms.
The state has been trying to legalize online casinos for the past five years, without success. Rep. Edgar Gonzalez filed similar bills three years ago and last year and has again sponsored the Internet Gaming Act (HB4797).
Racetracks and casinos would be charged the same license fee as they currently pay ($250,000) to obtain an igaming license. Platform operators that partner with license holders would be charged $100,000 or $50,000, depending on whether they are already licensed in Illinois.
Previous efforts have failed to make significant progress, and last year’s bill did not advance through committee. Gonzalez argues it can provide the state with essential funds, but it remains to be seen whether there is a greater appetite among fellow lawmakers this year.
Illinois Targets Gambling for Tax Revenue
The bill imposes a 25% tax on revenue generated by online casino platforms. Illinois lawmakers have been targeting gambling as a source of tax revenue, implementing a per-bet fee on sports bets placed in the state last year.
Sportsbooks have been highly critical of the unprecedented tax on both individual bets and overall revenue. Lawmakers raised the revenue tax from 15% to a sliding scale between 20% and 40% in 2024.
Betting companies were further angered when Chicago decided to introduce its own city betting tax at the end of last year. The Sports Betting Alliance (SBA), which comprises five of the largest gambling companies in Illinois and the US, filed a lawsuit against the city over the additional 10% tax.
The 25% rate for online casinos is lower, and companies would likely welcome the opportunity to expand into igaming in a ninth US state.
Governor Open to Online Casino Expansion
Gov. JB Pritzker has expressed openness to legalizing online casinos in Illinois. Last year, he said the topic is “worthy of consideration.” The billionaire has himself profited from casino games, winning $1.4 million playing in Las Vegas last year.
Other lawmakers have also signaled support to push through legislation. Sen. Cristina Castro has been the main driver of legislation in the Senate, introducing companion bills to Gonzalez’s efforts in the House.
Like Gonzalez, Castro says legalization can help make up budget shortfalls; she also believes it is “palatable to constituents.” At the proposed tax rate, allowing online casinos is estimated to generate around $800 million per year for the state.
She has not yet introduced a bill in the Senate this year, but may introduce another companion bill in the near future. Maine was the latest state to legalize online casinos, while legislation has also been introduced in New York and Virginia in the current session.
