The state of Illinois is one of the most confusing states to look at in terms of legalizing sports betting. It took lawmakers up until the final moment to officially vote to legalize sports betting, but then not much has been done since that time.
Sports betting has been legal since the beginning of June, but the state has yet to even announce a launch date, and it appears that it might not happen until at least 2020. Illinois has made it very clear that they are opposed to online/mobile gambling, but that isn’t the hang up this time.
State lawmakers have announced their new licensure requirements to offer sports betting in the state, and it will likely scare away more potential companies than it will attract them.
The first set of licensing fees deal with brick-and-mortar retail sports betting locations throughout the state. Illinois has proposed charging $10 million for an initial license fee, and then it would charge $1 million every five years to renew.
On top of that, the state of Illinois will tax each of these establishments at 25 percent of their gross revenue. These numbers are much higher than most of the other Midwest states that have legalized sports betting, and it is keeping companies from applying for a sports betting license. The state of Illinois is trying to work with retail locations to offer sports betting, but it doesn’t appear that many of them are willing to put up the money to initially get things going.
Worse For Online
Online and mobile sports betting is another huge part of this picture, and things get even more confusing when looking at these numbers. Illinois has set the licensing fee for an online/mobile sportsbook at $20 million, and there are only three of them available throughout the entire state.
Companies can apply for a “skins” license, and that licensing fee is $5 million. These type of sportsbooks would be taxed at a rate of 25 percent of the gross revenue as well, which would bring the state of Illinois a ton of money.
Illinois has made it clear that it is not in favor of mobile/online betting, and these extreme fees play a role in that. It’s hard for companies to justify paying this type of money to obtain a sports betting license, especially when you look at the current betting trends in the state.
The Illinois Commission on Government Forecasting and Accountability reported that tax revenues are now up to more than $1.4 billion per year on gaming, but that’s about the only number that was positive. The same commission announced that the state’s tax revenue on casinos in the state dropped for the 10th straight year, and fell by more than 3 percent this time around.
Casinos figure to play a large role in the proposed sports betting scene in the state of Illinois, but casinos aren’t making enough money to pay for the extremely high licensing fees. Illinois is going to have to do something about these extreme fees if sports betting is ever going to take off.