Illinois Legalizes Sports Betting, Expands Casino Gambling

The Illinois Legislature has finally passed a sweeping overhaul of the state’s gambling industry after multiple previous unsuccessful attempts. Over the weekend, the State House and then the State Senate voted in favor of a comprehensive legislation that, among other things, would now bring legal sports betting and expanded casino gambling to the state.

The bill now needs Gov. J.B. Pritzker’s signature in order to become law. The state’s top official has been among the staunchest supporters of the legalization of sports betting in Illinois and has previously said that he would sign a gambling expansion bill. This means that Illinois has joined about a dozen of other states that have legalized sports betting since last May’s ruling of the US Supreme Court that struck down a long-time federal ban on the practice.

How Things Unfolded This Past Weekend

The Illinois Legislature was scheduled to adjourn on Friday, May 31, but eventually extended its session until June 2. On Saturday, the State House passed a massive capital bill that, among other things, had the gambling expansion issue tacked onto it. The piece was then handed to the Senate, where it was passed by a 46-10-2 vote.

Under the legislation, the state’s casinos and race tracks will be able to provide online and in-person sports betting services. Their initial license fee would be $10 million and their licenses would be valid for four years. In addition, the state’s sports venues with seating capacity of more than 17,000 will too be able to provide sports betting at the actual venues or within a five-block radius.

Apart from sports betting, the bill also provides for the addition of up to six casinos around the state, including one in Chicago. The passage of that particular provision marks the culmination of a years-long effort for the expansion of casino gambling in the state and for bringing a Las Vegas-style gambling venue in the Chicago area, which is believed to be one of the state’s most lucrative markets.

The Chicago area license will also come with the opportunity for the addition of slot parlors at O’Hare and Midway Airports.

A portion of the revenue generated by Chicago’s casino would be used to finance police and firefighter funds. The bulk of revenue expected to be generated from expanded gambling in the state will be used for financing a $45 billion capital plan for infrastructure improvements, schools, universities, and other projects.

Gov. Pritzker said Sunday that he looks forward to sign the gambling expansion bill. The state’s top official also praised the Legislature for completing “one of the most ambitious consequential legislative sessions in this state’s history.”

Illinois has tried to expand gambling on multiple occasions during previous legislative sessions, but with no success. The legalization of sports betting and casino gambling within a single session and with overwhelming bipartisan support really makes the success of this session’s effort a landmark achievement.

Not Everyone Is Happy

The legalization of sports betting did not make all stakeholders happy, as the legislation authorizing the practice contains certain provisions that aim to benefit the state’s existing land-based casinos, but would prevent online operators, such as DraftKings and FanDuel, from entering the market immediately.

Under the bill, such operators will have to wait for 18 months before being able to obtain licenses from local regulators. This will make it possible for operators of existing venues in the state to enter the market and gain foothold before competition from online operators arrives.

A previous version of the sports betting legislation mandated that DraftKings and FanDuel would have had to wait for three years before being able to obtain licenses to operate in Illinois. That measure was supported by businessman Neil Bluhm, the former owner of Rivers Casino Des Plaines.

DraftKings and FanDuel jointly launched last month an advertising campaign to lobby against the blackout period provision. A 30-second spot was launched, targeting the measure as well as Mr. Bluhm, although the businessman was not directly mentioned. Gov. Pritzker ordered the ad be pulled, and the two operators complied with his order.

The final version of the bill did not mention DraftKings and FanDuel explicitly and had a reduced blackout period, but it is pretty clear that it targeted namely the two operators.

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