Discussions about the legalization of online casinos (iCasino) in Illinois are back in the spotlight. State Senator Edgar Gonzalez reintroduced the "Internet Gambling Act" (HB 4797) this week, marking his second year pushing the matter. Last year's proposal did not make it out of committee, but this year's version has made a comeback with a more specific framework. The core content of the new bill includes: allowing licensed operators to operate up to three online casino "skins", and imposing a 25% state tax on revenue. This matter needs to be discussed thoroughly, as it not only involves new sources of revenue but also brings concerns about the impact on physical casinos. Currently, eight states in the US have legalized online casinos, will Illinois be next?
Bill Core: Licensing, Taxation, and Protection Clauses
This year's proposal outlines a relatively clear operational blueprint. According to the bill, the Illinois Gaming Board will be responsible for issuing licenses and has the authority to issue emergency rules within 90 days after the bill passes, and possibly temporary licenses within 30 days. In addition to online casinos, Gonzalez also submitted a bill for the legalization of online poker (HB 4802), allowing state regulatory agencies to reach interstate online gambling agreements with other states.
To address the main opposition—that online casinos will "cannibalize" the revenue of physical casinos and lead to unemployment—the bill includes a protective clause: prohibiting licenses to companies that have laid off more than 25% of their workforce in the state since February 2020. This is clearly intended to alleviate the anxiety of the traditional gambling industry. The Sports Betting Alliance, which supports the bill and includes giants like BetMGM and DraftKings, naturally hopes to expand its business into the online casino sector.
Controversy and Prospects: Opposition Voices and Financial Temptations
Despite the protective clauses, opposition remains strong. The National Anti-iGaming Association explicitly opposes online casino legislation in various states, concerned about its impact on physical businesses and employment. However, supporters believe it represents a significant source of revenue. Supporters estimate that online casinos in Illinois could bring in up to $800 million in tax revenue annually. Governor Pritzker also mentioned last year that the legalization of online casinos "is worth considering," at a time when the state government was facing a $3 billion budget deficit. The Illinois Attorney General has also predicted that the state will legalize it "sometime in the future." With Maine becoming the eighth state to legalize last month, the pressure and motivation for states to seek new tax sources are increasing.
Complex Tax Environment: From State to City
The 25% tax rate in the Illinois online casino proposal did not come out of nowhere; it aligns with the lower tier of tax rates among the state's sports betting operators. Illinois' sports betting tax system has evolved into a complex tiered system, with rates ranging from 20% to 40%, and a per-bet tax was added to the budget last year. A more complex situation arises at the local level: this year's budget in Chicago includes a 10.25% local sports betting tax, which has caused strong backlash from state legislators, arguing that it harms consumers, fosters illegal markets, and erodes state tax revenue, even leading to lawsuits. This conflict over tax jurisdiction between the state and the city also casts a shadow of uncertainty over the future tax policy of online casinos. Whether the online casino bill can find a way out amidst the complex interplay of interests will be a key case to observe the trends in gambling legislation in the American Midwest. For in-depth analysis of gambling legislation and taxation processes in various states, visit the PASA official website.
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This article is from "PASA-Global iGaming Leaders," a gambling industry news channel:https://t.me/pasa_news
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