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With the Feb. 6 introduction of the Internet Gaming Act (HB 4797), Illinois became the fourth U.S. state to propose online casino legislation in 2026, joining VA, NY, and MD. The bill — sponsored by State Rep. Edgar Gonzalez of the 23rd district — marks the state’s fourth attempt at a legal iGaming market since 2021. If passed in its current form, each of the state’s 17 land-based casinos would be able to operate three “skins” (i.e., online casino apps/websites), allowing for up to 51 iGaming platforms in the Land of Lincoln.
Unlike some of its predecessors, HB 4797 is built for speed. Should it be signed into law, the Illinois Gaming Board (IGB) would only have 90 days to establish “emergency regulatory frameworks” for online casinos and 30 days to issue temporary licenses to qualified applicants.
The bill, which emphasizes workforce protections and a 25% tax rate on operators, would need a simple majority to make it out of the House. Following a similar vote from the Senate — which also has a companion bill, SB 3723 — the Internet Gaming Act would be sent to Governor Pritzker, who could sign it into law.
What Legalized iGaming Could Mean For Illinois
Illinois currently faces a budget deficit that many estimate could exceed $1 billion by 2027.
This year marks the end of a $3.5 billion federal pandemic aid package — the likes of which have been used to fund Chicago’s public transit services (i.e., CTA, Metra, Pace, etc.). This creates a $700 million recurring gap in a budget that’s already strained by pension obligations and interest payments that can exceed $20 billion annually.
Given the state’s fiscal condition, the potential windfall from a regulated online casino market could go a long way in alleviating some of the pressure borne by individual taxpayers. In Fiscal Year 2027 alone, Illinois plans on raising over $700 million in additional revenue by hiking tax rates on sports betting and capping corporate deductions.
In an email interview with bonus.com, State Rep. Edgar Gonzalez, Jr. shared that he sees a similar path for regulated online casinos
The financial boon that legalization portends for the state would help alleviate stress incurred by cuts in federal funding. Money from taxes and licensing can fund infrastructure, education, and state services, provided we regulate it properly.
Tax money accrued from a potential online casino market would go to the following:
- State General Fund (95%): This money is typically used to fund essential state services, including education, healthcare, and public safety.
- Local Governments (5%): Money distributed among municipalities and counties across the state.
The 25% tax is set to be the exclusive tax for internet gaming in Illinois. Local governments, like Chicago, are prohibited from imposing any additional taxes or fees.
Assuming tax rates are locked in at 25% — something that is very much subject to change —, how big is the potential pie for an Illinois iGaming industry? Gonzalez thinks it could be sizable.
We have used the $1B figure, and depending on whether amendments or other updates change the scope of the bill, that number may vary ie. if the tax rate changes.
$1 billion in annual tax revenue would spell $950 million for the State General Fund and $50 million for Local Governments.
Workforce Requirement
One of the hallmarks of HB 4797 is its “Workforce Requirement” clause. Specifically, the bill states that the Illinois Gaming Board will not issue an internet gaming license to any casino that has reduced its workforce by 25% or more since February 28, 2020.
Similarly, casinos seeking to renew their license must prove they haven’t cut their workforce by 25% or more since the date their previous license was issued or last renewed. Internet gaming licenses must be renewed every four years.
Gonzalez addressed the role of workforce requirements in HB 4797.
Concerns about casino workforce cuts specifically remove the cannibalization argument that opponents have lobbied against this proposal. We want to center the value of workers, especially live dealers, if iGaming passes.
The clause effectively serves as a hedge against possible job loss — particularly at retail casinos — that may result from the introduction of online gaming.
How the bill defines “workforce” is still up for interpretation. Whether this is limited to technical gaming jobs (e.g., dealers, cashiers, general managers, etc…), or includes hospitality and service staff, is something Gonzalez says could be fleshed out in the coming weeks and months.
The original intent concerns the technical jobs. I can see the Gaming Board setting rules to distinguish between the two; that is more a question for them, which they would consider should this bill advance further in committee.
HB 4797 is currently pending in the Rules Committee, waiting to be assigned to a substantive committee — likely the Executive Committee or the Gaming Committee. All bills must be passed out of substantive committees by March 27, 2026, to remain viable for the spring session.
