Illinois iGaming Tax Revenue Projections

How Much Revenue Would Illinois Realize From Regulating Online Gambling?

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In the waning days of the 2017 Illinois legislative session, regulated online gambling has leapt back into the mix.

There are a few bills in play, but the focus appears to be on SB 208, which would regulate both daily fantasy sports and online casino and poker games.

You can read the full text and view all activity on the bill here.

Following are our projections for the revenue both Illinois operators and the state would generate from regulating online gambling under SB 208.

The bill is in flux, so the particulars – including tax rate, license fee, and license eligibility – could all change rapidly.

Revenue and tax receipts from regulated online gambling

We expect Illinois’ regulated online gambling market to generate $1.53bn in revenue during the first five years of operation.

With a tax rate of 10 percent on casino games and 15 percent on poker, Illinois could expect some $160mm in tax revenue over the first five years of regulated online gambling.

The total take for the state could be increased by additional license fees for suppliers, license renewal fees, and other fees not contemplated by our analysis.

In millionsYear 1Year 2Year 3Year 4Year 5
Online poker revenue$47$41$40$39$39
Online casino revenue$233$275$306$347$355
Total industry revenue$280$316$346$386$394
Tax from poker (15%)$7.05$6.15$6$5.85$5.85
Tax from casino (15%)$34.95$41.25$45.9$52.05$53.25
Total tax revenue (not incl. fees)$42$47.4$51.9$57.9$59.1

Upfront revenue from license fees

The bill calls for a $10mm license fee.

The fee is an upfront tax payment, so the state will receive what is effectively a lump sum payment as opposed to additional revenue (although it does have the benefit of being guaranteed; some licensees could stop operation before paying $10mm in taxes).

Licensing is open to:

  • Riverboat license holders
  • Tracks
  • Eligible ADWs

Additionally, recently published amendments to the bill appear to contemplate a widening of license eligibility.

Considering all of the above, we believe that a conservative estimate will see 13 entities apply for an operator’s license in Illinois, generating an upfront payment to the state of $130mm.

Additional license fees for suppliers, skins, and other ancillary providers could easily push that number toward $150mm.

Significant local economic impact

New Jersey’s experience suggests that online gambling operators spend roughly 25 percent of gross revenue on marketing expenses.

The vast majority of that spend flows to local media, as national media campaigns are largely irrelevant for state-limited online gambling.

That translates to an expected local media spend exceeding $325mm in the first five years of operation.

Additional economic drivers include direct employment, indirect employment, and the complementary effect online gambling has on land-based casinos.


Revenue estimates are based on New Jersey’s experience with regulated online gambling and adjusted for the following factors:

  • GDP
  • Gambling eligible population
  • Internet penetration
  • Online poker penetration pre-Black Friday
  • Differential tax rate
Image credit: Nagel Photography /
- Chris is the publisher of Grove also serves as a consultant to various stakeholders in the regulated market for online gambling in the United States.
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