Welcome to the Senate Republican Press Search.

View Article Details

Print

Illinois sports betting stalls while Indiana, Iowa poised to launch books in weeks

Chicago Sun Times

Monday, August 12, 2019  |  Article  |  Mitchell Armentrout

Gambling, Gaming

The race to become the first Midwest hub of legal sports betting is on.

 

And Illinois is a lock to lose.

 

While Iowa launches its first legal sports books this week and Indiana gambling dens stand ready to start taking wagers next month, money will keep burning holes in the pockets of eager Illinois bettors as football season kicks into gear.

 

Even though the state’s massive gaming expansion was signed into law over six weeks ago, the Illinois Gaming Board still has to draft hundreds of rules governing application and oversight procedures that aren’t spelled out in the law. And while state lawmakers initially said they thought sports betting could launch in Illinois in time for the NFL kickoff in September — or at least by the Super Bowl in February — there’s no rollout in sight.

 

At a meeting last week, gaming board authorities said they expected to soon begin releasing some of the emergency rules that will ease casino and video gaming expansion into motion. But regulators have yet to set a timeline for a sports betting.

 

That’s only natural for a gargantuan task “with a lot of moving parts,” gaming board administrator Marcus Fruchter said.

 

“We’re creating an entire industry from scratch. You’ve got to take time to do that deliberately and not rush into something that either doesn’t work or has problems or any number of other concerns,” he said.

 

Fruchter noted the law doesn’t include any deadlines for implementation. The only date listed in the Sports Wagering Act requires the board to commission a study by March about the online betting industry’s inclusion of women, minorities and people with disabilities.

 

And rule-making can be a lengthy process. It took about three years for video gaming to launch statewide after it was legalized with then-Gov. Pat Quinn’s signature in 2009.

 

 

“We’re following a process, and we’re going through and making sure we have the right approach for the state, which deserves integrity and adequate safeguards,” Fruchter said. “Process is very important — making sure that it’s independent and transparent.”

 

It doesn’t help that sports wagering is just one cog in the unprecedented gaming expansion dumped on the lap of the 150-employee agency, which currently is responsible for vetting and overseeing the operators of 10 casinos and nearly 32,000 video gaming terminals. Six new casinos, a “racino,” even more video gaming and casino games at race tracks will soon be added to the mix.

 

Iowa and Indiana jumped to an early lead on their sports-betting launches over Illinois when their governors signed bills into law in early May, almost two months before Gov. J.B. Pritzker OK’d the expansion June 28.

 

And the tax structures in Indiana and Iowa certainly make them more appealing destinations for sports-betting operators than Illinois, where fees dwarf those of its neighbors.

 

In Indiana — where some casinos could start taking wagers by Sept. 1 — licenses cost $75,000 up-front to open a brick-and-mortar sports book, with operators on the hook for $50,000 every five years to cover an updated background investigation. Online operators will pay $10,000 for a license, plus $5,000 yearly renewals. The Hoosier State will then take a 9.25% tax of each book’s revenue collected after paying out winners, according to the Indiana Gaming Commission.

 

Iowa casinos — which will start taking wagers Aug. 15 — can get a sports-betting license for just $45,000 with $10,000 yearly renewals, with mobile betting tied to participating casinos. The Hawkeye State will take just 6.75% off the top in taxes, according to the Iowa Racing and Gaming Commission.

 

Compare that to the mammoth costs set in Illinois, where licensing fees for its 10 existing casinos and three horse racing tracks are tabbed at 5% of the money each location took in during the year prior, with a maximum fee of $10 million. Professional teams too can fork out $10 million to set up books at or near their stadiums — like Wrigley or Soldier Field — as long as they hold 17,000 or more attendees.

And in 18 months, online-only operators like DraftKings and FanDuel — who, for now, are “boxed out” of the state unless they partner with a physical location — can apply for one of three online sports-betting licenses at a whopping $20 million.

 

All operators would have to pay $1 million to renew licenses every four years.

 

After that, Illinois will take a 15% tax on all sports-betting revenue. That’s jacked up to 17% in Cook County, with the extra two points supporting the county’s criminal justice system.

 

The Illinois price tag hasn’t stopped gaming interests from lining up for the opportunity, whenever it may come. Hawthorne Race Course and Rivers Casino have already announced plans to construct massive sports books.

 

 Hawthorne Race Course pictured in October 2017.

Hawthorne Race Course pictured in October 2017. Sun-Times files

Supporters in Springfield say the Illinois law will generate up to $240 million for the state in initial licensing fees, and they estimate the industry eventually will pull about $60 million into Illinois coffers every year. All the money is earmarked for Pritzker’s $45 billion capital plan for new roads, bridges and myriad other projects.

 

Those are significantly rosier estimates than from Indiana, where lawmakers have said sports betting will eventually rake in about $12 million for the state annually, or from Iowa, where officials have suggested the state’s yearly take will hover around $4 million.

 

New Jersey — which has quickly become the nation’s biggest sports-betting hub outside of Las Vegas since the U.S. Supreme Court opened up wagering last summer — has racked up about $13.4 million in taxes off the industry so far this year, according to its Division of Gaming Enforcement. The Garden State imposes an 8.5% tax on physical sports books’ revenue, while hitting online-only operators with a 13% tax.

 

The Illinois Gaming Board is next scheduled to meet Sept. 5 — the day of the Bears’ season opener against the Green Bay Packers.