Online casinos could once again become an important topic of conversation in the Illinois legislature in 2025. Once considered a top contender for legalizing iGaming, the state has seen little movement over the past two years. However, as lawmakers are looking for ways to fill a $3 billion budget shortfall, online casinos could be back in consideration when Gov. J.B. Pritzker submits his budget draft next month. Even the Governor himself is interested.
Pritzker recently called iGaming legalization “worthy of consideration,” according to the Chicago Sun-Times.
The Governor is known to be open-minded about gambling expansion. Since he took office in 2019, the state has expanded its gambling options, including legalizing mobile sports betting and opening six new casinos, including two in the final months of 2024. Last year, Gov. Pritzker advocated raising sportsbook tax rates to bring more money to the budget. Eventually, lawmakers approved a progressive tax system where operators pay up to 40% tax based on revenue, replacing the previous flat 15% rate.
Online casino revenue could fill budget gaps
Legalizing iGaming could bring a much-needed injection of new tax revenue. According to proponents, Illinois online casinos could generate $450 million in tax revenue within a year, eventually up to $800 million. For comparison, in Pennsylvania, which has only a slightly higher population than Illinois, online casinos generated over $840 million in tax revenue for the fiscal year 2023-2024, meaning the estimates could be a realistic goal.
That could be welcome news for Illinois, which faces a $3 billion gap for the 2025 budget. According to iGaming proponent state Sen. Cristina Castro, iGaming is a way to raise revenue, and she believes it could gain constituent support. Castro has been a key sponsor of Senate gaming bills, including the 2023 effort.
Previous iGaming expansion efforts fell short
Illinois has a well-established retail casino industry. It’s also business-friendly and socially liberal, which are all factors for successful iGaming expansions in other states. That’s why Illinois was once a top contender for industry observers for the next state legalizing online casinos. However, those hopes quickly evaporated as proposals failed to gain traction.
In 2023, Rep. Edgar Gonzalez Jr. introduced the Internet Gaming Act (IGA) in the House, with a companion bill sponsored by Sen. Castro in the Senate. Both bills failed to advance past the committee stages. Illinois has two-year legislative sessions, so those proposals remained active in 2024. However, like 2023, IGA saw little movement but no action. Rep. Gonzalez expected that, as he told Bonus, he considers the effort a “long-term project.” He and Castro have spoken about the need to educate fellow lawmakers about online casinos.
Online casinos will face opposition from the VGT industry
Past iGaming proposals failed primarily because of opposition from retail casino labor unions and the video gaming terminal (VGT) industry. VGTs are similar to casino slots but are available at retail establishments like bars and truck stops in local municipalities that allow them. Illinois is home to over 45,000 such machines, far more than any other state, in over 8,600 locations.
VGTs are the king of gambling in the state. The machines contributed $848 million in tax revenue in the past fiscal year. For comparison, sports betting generated $190 million, while retail casinos generated $158 million. The VGT manufacturers and small businesses hosting the machines, therefore, hold a lot of sway in the Illinois political scene,
As with iGaming efforts elsewhere, opponents raise fears of cannibalization. According to Keith Wetherell, executive director of the Illinois Licensed Beverage Association, introducing online casinos could cause some businesses to see revenue drop by 40%.
Rep. John Cabello has echoed that opinion in the legislature, saying he believes people will stop visiting retail gaming locations if a legal online option is available.
Further complicating matters is the fact that the VGT industry already faces declining revenue thanks to overproliferation in some areas. Several municipalities, like Galesburg, have started or are considering limiting the number of VGTs.
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