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Illinois Sports Betting: Amendments Introduced

In a series of amendments filed last Thursday, lawmakers have put all options on the table for legalizing the Illinois sports betting industry.

State representative Mike Zalewski (D-23) filed placeholder legislation back in February, but rather than outline his House Bill 3308 with a detailed Illinois sports betting plan, he waited until last week to tack on four amendments.

Supporters Go for Multifaceted Amendment Approach

By offering his colleagues within the Illinois General Assembly multiple options, Zalewski hopes to generate productive debate that can eventually crystallize into concrete legislation.

Each amendment offers distinct licensing schemes, tax rates, and regulatory details based on successful sports betting models established in other states.

In a statement issued by his office to announce the amendment package, Zalewski encouraged fellow lawmakers to study the plans closely before deciding which one will work best for Illinois’ gambling industry:

“What we have learned the last few months is there is great interest and agreement in the gaming industry to bring sports betting and its economic benefits to Illinois, and little agreement yet on how to best do it.

By presenting these four proposals today and encouraging robust discussion on everything, I believe we can work out a plan that provides responsible regulation, a safe atmosphere for adult sports fans to bet on their favorite teams and games, and meaningful economic benefits for our businesses and our tax coffers.

It’s time to get to work.”

Each Illinois Sports Betting Amendment Offers Different Plan

The first Illinois sports betting amendment introduced has been given the nickname “New Jersey” based on its resemblance to the Garden State’s thriving sports betting scene.

Under the New Jersey plan, Illinois’ 10 brick and mortar casinos, plus the state’s horseracing tracks, would be eligible to operate onsite sportsbooks under the auspices of the state Gaming Board. These venues would also be able to offer online / mobile wagering under two brand “skins” apiece. Online / mobile bets would be accepted from anywhere in the state, and remote registration would be offered.

The New Jersey plan calls for a $10 million licensing fee, a $250,000 renewal fee paid every five years for a land-based sportsbook, along with a $1 million / $500,000 fee schedule for online operators. Revenue derived from in-person wagering would be taxed at 20 percent, while online bets would incur a 15 percent tax.

In an interview with The Southern Illinoisan, Zalewski offered his personal take on the New Jersey amendment:

“I think the New Jersey model is what most people expected [Illinois’] to look like.

It’s kinder to existing bricks-and-mortar and racetrack casinos, gives them the first slice at implementing it, and has a reasonable tax rate.”

The “Mississippi” amendment offers a similar setup, with off-track betting (OTB) parlors joining land-based casinos and racetracks as potential sportsbook operators. All wagering revenue would be taxed at 15 percent, and license fees would start at $10 million followed by a $500,000 renewal fee every five years.

But as is the case in Mississippi, online wagering would only be allowed when bettors are physically located on a licensed sportsbook venue’s property.

A third amendment dubbed “Lottery” would follow the lead of states like Delaware and Rhode Island, where the local lottery program oversees and operates sports betting. The Illinois Department of Lottery would essentially receive a local monopoly on Illinois sports betting, which would be conducted by an exclusive third-party operator via existing lotto ticket kiosks. Gross gaming revenue would be taxed at a much higher rate of 50 percent.

The final amendment, and sure to be the most controversial, is known as the “Professional Sports Leagues” plan because it calls for paying major pro sports leagues a royalty fee of 0.25 percent on wagering revenue.

The leagues have consistently requested states considering sports betting legislation pay this so-called “integrity fee” in exchange for internal data. Even so, none of the seven states – Delaware, New Jersey, Mississippi, West Virginia, New Mexico, Pennsylvania, and Rhode Island – that have legalized the industry since last May have included an integrity fee in their respective laws.