The latest development out of Illinois, where lawmakers are launching a last-minute attempt to legalize daily fantasy sports (DFS) and online casino / poker, saw the state Senate vote 42-10 in favor of passage.
Interestingly, despite several competing bills floating through the Illinois legislature in recent months, a seemingly unrelated proposal known as House Bill 479 was amended to include DFS and online casino / poker gaming.
H-479 was originally drafted with a simple objective – revising Illinois’ state seal to include its statehood date – but as lawmakers scrambled to meet a looming legislative deadline of May 31, an iGaming amendment was added from the Senate floor.
That amendment calls for the creation of two new laws, with the Fantasy Sports Contest Act covering DFS, and the Internet Gaming Act encompassing slots and casino table games. The latter Act would also establish the Division of Internet Gaming, an agency which would operate within the existing Illinois Gaming Board to oversee iGaming licensing and regulation.
Political watchdogs previously had their eye on Illinois as a top prospect for DFS legalization, especially after the Senate passed a DFS-only bill in 2016. That effort stalled in the House, leading to this year’s wave of DFS-focused proposals being introduced to begin the new legislative session.
But as state senator Kwame Raoul (D-13) – who led five members of the Senate in sponsoring H-479 – told the Chicago Tribune ahead of the May 31 deadline, the political will to expand DFS into full-fledged iGaming coalesced at a rapid pace:
“There was controversy last year as to why are we regulating daily fantasy sports activity, which is ongoing in the state, and not regulating internet gaming, which is also occurring.
So, what this bill attempts to do is also regulate and bring licensure and supervision of internet gaming under the jurisdiction of the Gaming Board. And it would limit the operation of internet gaming to existing casinos.”
The same report revealed that lawmakers added online casino / poker gaming to the mix in an effort to “bring on board casino operators, who view fantasy sports as competition but have long wanted to break into the online gambling space.”
One of those casino operators previously obstructing DFS regulation was Rush Street Gaming, operator of the Rivers Casino in the Chicago suburb of Des Plaines. Rush Street Gaming already has a presence within the iGaming market via its PlaySugarHouse online casino platform, which expands the company’s Philadelphia-based SugarHouse Casino into New Jersey’s regulated online gambling marketplace.
Additional negotiations were needed to bring all stakeholders on board, and as the Chicago Tribune detailed, those deliberations went deep. A group of representatives from the state’s horse racing industry convened to challenge H-479, but Raoul quickly moved to amend the bill rather than delay action until the next legislative session.
By adding racetracks to the list of parties eligible to apply for an iGaming license, along with Illinois’ land-based casinos, Raoul brought the struggling industry onboard.
After the Senate voted overwhelmingly to pass H-479 – which would tax DFS and iGaming operators at rates of 5 percent and 15 percent, respectively – rumors emerged that a late-night vote on the House floor would be held to beat the deadline.
Instead, as the Associated Press reports, members of the House opted to pass a temporary extension, allowing the body to continue its review of H-479, and the all-important state budget, throughout the summer:
“The Illinois House is indicating that there won’t be a budget agreement before the end of the day when lawmakers face a critical deadline.
The House adopted a resolution saying after they adjourn on Wednesday, members would meet in ‘continuous session.'”
In its second year without authorizing a budget, the Illinois legislature will be facing increased pressure to forge a deal.
With outlets like Online Poker Report forecasting $160 million in additional iGaming-generated tax revenue over the next five years, that pressure may be enough to make Illinois the fourth state to set up a regulated online gambling industry.