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Illinois lawmakers are moving forward on their promise to consider legalizing online casino gambling in 2021. To that end, members of the Illinois House Executive Committee held a hearing today on the proposed Internet Gaming Act.
Anyone watching the Illinois General Assembly consider the act probably came away with an optimistic impression. If there’s any remaining cause for skepticism, it’s mainly about the launch date. Although Illinois sports betting became legal in spring 2019, the first app only launched on June 18 the following year. The state is hoping for a much faster timeline from iGaming legalization to launch.
That sports betting law required gamblers to register at land-based retail casinos during the first six months. The Internet Gaming Act contains a similar clause.
For residents of Chicago, that will mean travel outside of municipal boundaries in order to register. The city is considering proposals for its first retail casino, but it won’t choose a winner until early 2022, and construction could take years. Fortunately, there are several casinos in the Chicago Metropolitan Area, just outside the city’s official limits.
During the lengthy hearing, Committee Chairman Rep. Bob Rita said stakehoders’ comments would help inform the state’s gaming package. He specifically asked if retail casinos would lay off employees if Illinois passed the Internet Gaming Act.
Pandemic restrictions have forced retail casinos to close or limit their capacities, even as states have worked on expanding other forms of gambling. That makes the question a little more difficult to answer, responded John A. Pappas, founder and CEO of Corridor Consulting. He spoke to the committee on behalf of the nonprofit iDEA Growth (iDevelopment and Economic Association) in favor of legalizing iGaming and online poker in Illinois.
The association represents online gambling and sports betting operators who do business in the US or would like to do so. Before the hearing, Pappas said he appreciated input from some representatives of the association’s 30 companies, including DraftKings, FanDuel, GeoGuard, Golden Nugget Online Gaming and Sportradar.
Pappas said he wasn’t aware of any decrease in employment due to iGaming. He said that in fact there’s generally an increase in staffing for both channels.
Jeff Kaplan, vice president of strategic and financial planning at Penn National Gaming, said iGaming would cause “no cannibalization” of retail casino revenue. He pointed to Pennsylvania’s experience with online gambling as evidence of this.
“If anything, it’s a net benefit to those properties,” Kaplan testified.
Trevor Hayes, William Hill‘s head of government relations, agreed. Because online gamblers tend to be younger and they’re supplementing their online play with visits to the casino, it’s actually helping land-based properties, which traditionally tend to have an older customer population.
“We’re now reaching customers we weren’t before,” Hayes said.
He noted that British bookmaker William Hill is now part of Caesars Entertainment.
Pappas expects that Illinois operators will generate $250 million in revenue during the first year of legal iGaming. He further estimated that the financial benefit to the state – both direct and indirect – will amount to $1 billion or more over the first five years.
“We know a good bill when we see it,” Pappas said.
Kaplan seconded the sentiment, then added his belief that the state’s iGaming revenue will be far higher than Michigan’s. He said that it will help make up for money Illinois has lost during the pandemic.
Similar testimony came from Brendan Bussmann, a partner and director of government affairs for Global Market Advisors – a gaming, entertainment, sports, hospitality research and consulting firm.
“There’s a definite pent-up demand for iGaming,” Bussmann said.
The wide-ranging testimony from everyone from a collegiate athletic director to union leaders was sorted into 11 panels. Most speakers advocated for passing the Illinois online casino legislation.
That isn’t to say there were no criticisms at all. Bussmann and Pappas asked the committee to remove the bill’s in-person registration requirement. They said many online bettors won’t travel to register, which will mean lost revenue for both the operators and the state. There’s also no reason to believe that the requirement will make bettors safer, as online operators already provide ample safety features and identity verification checks.
The existing 2019 sports betting bill also faced criticism for its ban on collegiate sports betting. Pappas said that Illinois is losing up to 15% of its potential revenue due to the ban.
Rep. Michael J. Zalewski likewise said that sports betting should include college sports. He testified in favor of his own proposed bill to lift the prohibition.
One sports team owner also testified to ask that the option be added to bet on his organization’s games. John Washington Rogers Jr., who co-owns the Chicago Sky WNBA team said that its games had been excluded from sportsbooks.
In order to address these issues this year, state lawmakers will need to act before the legislative session adjourns on May 31.