Illinois took a big step forward towards sports betting after incoming Governor J.B. Pritzker called for the legalization as part of his budget address. Pritzker included sports betting revenue in his budget proposal to the state legislature on Wednesday, February 20.
Democrat governor Pritzker outlined his vision for sports betting during a 30-minute speech. “This budget also includes the legalization and taxation of sports betting.” Pritzer was ambitious in predicting $217 million in the state budget from sports betting during the fiscal year 2020. Most of which comes from the 20 sports wagering licenses at a cost of $10 million each.
Sports betting is different – this is a new market created by a recent U.S. Supreme Court decision. Every day we argue about ‘who’s in and who’s out’ is money that goes to other states and to the black market. I am calling on the legislature to take this up immediately so that Illinois can realize hundreds of millions of dollars, create new jobs, and bring sports betting into a regulated environment that will protect citizens from bad actors. If we do it this year and become the first state in the Midwest to move on this initiative, we can realize more than $200 million from sports betting fees and taxes in FY 2020.
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According to the Illinois legislature website, there are several bill waiting to be filled out in the House, and a full-fledged measure that is sitting in a Senate Committee, SB176 calls for both online and mobile betting.
Under the governor’s plans, mobile would be allowed.
The governor wants 20 sports betting licenses in the state, with a 20% tax on revenue. The 20 percent tax would be the second highest in the country behind Pennsylvania’s 36 percent.
On top of that, he also wants a $10 million licensing fee for online sports betting platforms, with only a $5,000 a year renewal fee.
For the first five years of operation, sports wagering operators would be able to deduct a maximum of 90% of one-fifth of the initial license fee each year from the sports wagering tax,
the budget proposal stated
This license fee and tax credit proposal will allow the state to accelerate an estimated $200 million in future tax revenue into the fiscal year 2020.
The Illinois General Assembly ends on May 31, so any serious sports betting activity will need to heat up in the next few weeks if the state expects sports betting to be legal in 2019.
Pritzker wants to see tax revenue deposited into the State Gaming Fund.
The proposed budget says exactly how much money Pritzker believes Illinois sports betting can bring:
Based on estimates from Oxford Economics, Illinois could generate between $384 million and $680 million in gross sports wagering revenues per year under full implementation. At the proposed 20 percent tax rate, this would generate tax revenues of between $77 million and $136 million per year.
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