Illinois politicians just can’t seem to leave the state’s legal sports betting framework alone, and this week was no exception. In the state where the tax rate has been increased or added to three times in the last two years, making it three times as expensive to do business in the state as it was at launch in 2020, it’s possible relief may be coming.
On Jan. 1, wagering operators began paying another tax, this one to the city of Chicago. Mayor Brandon Johnson cooked up the idea, which he put into a budget proposal that he ultimately did not sign or veto, allowing it to go into effect on New Year’s Day. The additional 10.25% tax on wagers made in the city is rife with problems, including that operators feared they would have to shutter because these was no license structure in place.
Rep. Daniel Didech thinks the city has no place taxing sports betting operators who are regulated by the state. It’s looking like his colleagues in Springfield agree, as HB 4171 passed unanimously out of the House Gaming Committee with no debate Wednesday. The bill, which would ban any body other than the state legislature from taxing gaming entities, has 32 co-sponsors.
The Sports Betting Alliance (SBA), comprised of bet365, BetMGM, DraftKings, Fanatics Sportsbook, and FanDuel, has lobbied against every tax hike in Illinois. All five operators are live in the state.
“The City of Chicago’s proposal, however, sets a dangerous precedent for more than 200 home-rule municipalities across Illinois,” the SBA wrote in a press release Thursday. “If each (or even many) were to impose its own tax on a state-regulated industry, we would end up with a fragmented and unstable framework that undermines the consistency and predictability required for effective state regulation. The ripple effect could extend far beyond gaming. These types of policies could open the door for a patchwork of local taxes in other state-controlled policy areas, making enforcement and compliance nearly impossible.”
There are at least a dozen bills related to gaming circulating in Illinois’ legislature, which is in session until May 31. The crossover deadline is March 17. Another bill of note is SB 3232, which would eliminate three $20 million stand-alone mobile licenses. Those licenses were supposed to attract major, national operators and eliminate the need to be tethered to a licensed casino or qualified sports venue. But all three licenses are still available, and the bill would lower the cost to $15 million, would not limit how many are available, and would lower the application and renewal fees.
Illinois sports betting has been live more than five years, which means it would be considered a “mature” market. Every major U.S. operator is licensed, making it unclear who the legislature thinks these licenses will appeal to.
In other news …
Here’s a look at the status of other active bills around the U.S.
Louisiana: The legislative session doesn’t open until March 9, but Rep. Rodney Schamerhorn wants one of the parishes he represents to be first in line to reconsider whether or not to allow online sports betting. HB 146 would allow for a referendum for sports betting in Sabine Parish, one of five that in November 2020 voted against allowing it. The parish borders Texas, and is in the west-central part of the state. The legislation would call for a special election at which voters would make the decision.
Maine: Lawmakers from the Committee on Veterans and Legal Affairs were split on whether or not to impose a ban on funding gambling accounts via credit card after a work session Wednesday, but LD 2080 is moving forward to the full committee for consideration. No hearing or voting date has been set. The legislature is in session until April 15.
Washington: The Washington state bill that would allow more prop bets had its first House committee meeting since passing out of the Senate Feb. 11. The House State Government and Tribal Relations Committee held a public hearing Friday, and the bill is scheduled for back-to-back committee executive sessions Feb. 24 and 25. HB 6137 would lift a ban on college team prop bets, but not college player prop bets. Sports betting in Washington is controlled by Indian Country and is in-person only.
