If state lawmakers approve SB323 amending the Sports Wagering Act, Illinois sports betting suppliers may pay $10 million less in renewal fees during the next eight years, according to the Illinois Gaming Board (IGB). However, that’s money the state needs and that suppliers agreed to pay, said state representatives during an April 19 Illinois House Gaming Committee hearing.
The current $150,000-a-year, four-year renewal fee that will cost an online sports betting supplier $600,000 total is the highest in the country, testified a representative for iDEA Growth (iDevelopment and Economic Association).
Suppliers agreed to sign up because they thought the renewal fee was “a mistake,” the trade organization representative said.
That’s because the renewal fee costs significantly more than the initial fees, the iDEA Growth representative said.
SB323 shows Illinois sports betting suppliers – like GeoComply – needed to pay $150,000 for the initial license and application fee. After four years, the renewal fees kick in.
That four-year mark is approaching. The Illinois sports betting marketplace launched in 2020.
So in today’s 50-minute-long hearing that Bonus attended via audio stream, the trade organization representative testified that suppliers would like to see their renewal fees reduced to $50,000 every four years. That’s what the bill outlines. However, even if that happens, Illinois will still have the most expensive sports betting supplier renewal fees in the US.
That’s where the IGB math of $10 million fewer dollars in renewal fees from the 15 existing operators originates.
Meanwhile, Bonus calculates that if two current applicants are approved as Illinois sports betting suppliers, they’ll add $1.5 million with the current law or $400,000 under the amended law during their first eight years of operation. That’s an additional $1.1 million difference if the bill passes.
Suppliers provide geolocation, payment processing, content, tech, and “know your customer” (KYC) services. KYC verifies online gamblers’ identities. Suppliers aren’t operators, like DraftKings, the iDEA Growth representative clarified.
US online casino operators also use such suppliers.
However, the Land of Lincoln doesn’t yet have iGaming. Illinois online casino bills failed to progress during 2023.
Illinois Sports Betting Suppliers Have Senate Backers
On March 29, Senators passed SB323 in a 55-1 vote. Now the ball’s in the House’s court.
State Sen. Laura M. Murphy, D-Des Plaines, cast the sole “no” vote in the Senate. Her district in suburban Chicago houses Rivers Casino, which will soon have to compete with a $1.7 billion Chicago retail casino.
Meanwhile, the measure that state Sen. Cristina Castro introduced on Groundhog Day progressed quickly through that chamber of the Illinois General Assembly. So the Democrat from Elgin saw the bill move to the House on March 30. There, state Rep. Daniel Didech, D-Buffalo Grove, sponsored SB323.
Didech spoke in today’s hearing held by the committee he heads. He said that the current renewal fees are supporting infrastructure projects.
While he and other representatives didn’t say they opposed changing the renewal fees, the representative of the IGB said he was against passing SB323. His only reason to do so was that reducing the fees would decrease state funds.
State coffers have received $258,928,735 in tax revenue from sports betting, according to PlayIllinois. That’s a Catena Media site, as is Bonus.
The Case for the Status Quo
Representatives who spoke during today’s hearing said things like:
A high bar preserves integrity.
You get what you pay for.
Relating to the latter statement, the committee’s vice chairman – state Rep. Bob Rita, D-Blue Island – said Illinois is a sought-after sports betting state. Suppliers read the law before applying, he emphasized.
Rita asked:
They knew what they were getting into?
Although Rita often acts as a devil’s advocate in committees, his name is regularly on legal gambling expansion measures.
He’s known as the mediator who helped usher in legal sports betting. Rita also sponsored online casino bills in previous years, but not in 2023.
Relatedly, state Rep. Jonathan Carroll, D-Northbrook, argued for the status quo.
Carroll added:
I think most people think it’s a solid product.
So what would change if lawmakers approve a fee reduction?
The relevant portion of the Sports Wagering Act now reads:
Beginning 4 years after issuance of the initial supplier license, a holder of a supplier license shall pay a $150,000 annual license fee.
SB323 would change that to:
Beginning 4 years after issuance of the initial supplier license, a holder of a supplier license shall pay a $50,000 license fee for each additional 4-year renewal period.
The IGB representative said the Illinois online sports betting market is comparable to those in New Jersey, Nevada, and Pennsylvania. No one argued that those states charge suppliers much less than the Illinois renewal fees, current or proposed.
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