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Illinois Legislature – SB 1739   More

Illinois introduces online gaming legislation

7th March, 2013 | Illinois, US | Illinois Legislature – SB 1739

Following the path of Nevada and New Jersey legalising online in the last weeks and just 48 hours after Gov. Quinn vetoed a measure to open a casino in Chicago, Illinois introduces an amended bill to expand the state’s land-based gaming operations and introduce internet gambling.

Nevada and New Jersey joined Delaware as the nation’s only states to have passed interstate online gaming legislation. Under the measures, states can form compacts with each other to attract more players and expand jackpot pools. As well as Illinois quickly taking action to introduce a measure, other states such as Massachusetts, California, Iowa and Pennsylvania are weighing possible legislation.

Illinois attempted to similar legislation last year, which would have enabled the state’s current license holders to offer online gaming overseen by the Illinois Lottery. But this was abandoned in June 2012 after the bill’s principal sponsor Sen. John Cullerton pulled the measure, believing that there was not enough support to ensure passage.

This time around, the bill came at a time when state budgets are being issued and it instantly passed a State Executive Committee by a 10-4 margin. During his state budget address on Wednesday, Governor Pat Quinn made it clear that he welcomed gambling expansion under the proper conditions. “Any enhancement that we enact to gaming revenues this year should be dedicated to education,” explained Quinn, after indicating that a substantial $400m would be cut from the state’s education budget.

Quinn has vetoed two previous attempts by state lawmakers to expand gambling in the state, with the most recent earlier this week. “This is a bad bill for the people of Illinois,” Quinn wrote on Monday, but called on legislators “to work with me, my staff, the Illinois Gaming Board, the Illinois Racing Board, the city of Chicago and all other interested parties to ensure that the final version of any gaming legislation includes strong ethical standards and clear regulatory oversight.”

Just two days after the veto message, Senator Terry Link introduced an amended version of SB 1739 that includes procedural guidelines and restrictions aimed at curbing corruption and boosting revenue awarded to education. The measure focuses on the intrastate online gaming model and would establish a Division of Internet Gaming to regulate the sector. Operator and technology vendor licenses would be valid for five years and applications must be accompanied by a non-refundable $250k.

Operators awarded a license in Illinois would have to front $20m as an advanced payment on wagering taxes, which are 20 percent of gross gaming revenue for “non-fee-based games” and 15 percent for “fee-based games”, such as poker. However, for the initial five year period, non-fee-based games would be taxed at 10 percent on the first $200m earned and 20 percent on anything above.

The bill also allows for additional land-based casinos in the state including one in the city of Chicago, as well as slot machines at the city’s airports and Illinois horse racetracks. But this extensive nature of a single bill is enough to prevent the measure and online gaming passing in the state. Quinn has been on record saying that he doesn’t want Chicago to be known as “The Las Vegas of the Midewest”, something he believes the city would have become if the previous bills had been enacted.