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Overview: Online Sports Betting in Illinois

Overview: Online Sports Betting in Illinois

Since the Supreme Court struck down PASPA in 2018, states have been building sports betting industries across the nation. Illinois is no exception. The first bet in Illinois was placed on March 9, 2020. Eddie Olczyk made the first bet at BetRivers, betting $100 on the White Sox to win the American League with 16-to-1 odds. The first Illinois bet was a loss. But despite the shutdowns shortly after Olczyk’s bet, the industry has grown by leaps and bounds. Here’s what bettors in the Land of Lincoln need to know about the online sports betting industry in Illinois.

How Did Illinois Legalize Online Sports Betting?

First, the Supreme Court had to repeal the law outlawing sports betting in Illinois – and most of the country. PASPA was a law passed in 1992 that prevented 46 states from regulating sports betting. That effectively outlawed sports betting in all but four states that already had it. New Jersey had the chance to be the fifth exemption but didn’t try legalizing it until after its deadline. New Jersey got into a legal battle that it ultimately won. PASPA was struck down in a 6-3 decision, and every state was free to legalize sports betting.

Illinois took advantage. The summer after the ruling, Illinois lawmakers sent a sports betting bill to the Governor’s desk. The Governor signed it, Illinois’ Gaming Board wrote the rules governing sports betting, and retail sports betting went live on March 9, 2020. Online sports betting followed later that summer.

How Much Money Does Illinois Online Sports Betting Make?

Illinois has built a robust sports betting industry. It’s not the largest in the country, but it’s a strong showing for a new sports betting state. Illinois retail sports betting began on March 6, 2020, but shut down on March 16 when the lockdowns began. Online sports betting went live on June 18, and retail sports betting returned on July 1. Illinois has really only had steady sports betting revenue since July. At the time of this writing, that’s only five months of sports betting.

And we only have three months of data from the Illinois Gaming Board – a data cruncher’s nightmare!

Here’s how much money Illinois online sports betting has made in the three full months we have:

Online Betting Handle $457,050,180.70
Online Payouts $442,825,377.00
Online Gross Gaming Revenue $14,224,803.70
Online Sports Betting Taxes $2,453,550.15

That’s a great show for only three full months of betting. Illinois bettors wagered over $457 million and got almost $443 million back. That leftover $14 million for Illinois sportsbooks. And whatever’s left over after promotions and the federal excise tax was taxed at 15%. A $2.4 million quarter is a good start for Illinois’ online sports betting contribution.

Even better, that number’s low-balling how much money Illinois has made so far. Sportsbook revenue reports aren’t due until the end of each month. They also take time for government officials to process the numbers and integrate them into Illinois’ monthly reports section. Once October and November’s numbers go up, we’ll see just how profitable online sports betting in Illinois is.

Where Does Illinois Sports Betting Tax Revenue Go?

Illinois sports betting tax revenues will help fund Illinois infrastructure projects. These include traditional infrastructure projects like roads and bridges. However, they also include “education infrastructure,” which includes everything from early childhood providers to universities. It’s all part of Governor Pritzker’s $45 billion capital plan that purports to reinvest in Illinois communities.

So far, it’s difficult to say how the $2.4 million in taxes breaks down to fund different parts of the infrastructure plan. It’s probably not going to be a clean split into roads, bridges, and education. Taxable revenue from Illinois sports betting has been projected as high as $756 million per year. That’s a $113.4 million tax bill if that projection comes true. It’s a tiny slice of Governor Pritzker’s $45 billion infrastructure project. But online sports betting may become a larger piece of the puzzle as the industry matures.

Is Anything Missing From Illinois’ Online Sports Betting Industry?

There’s one part of the industry that’s great for security, but inconvenient for bettors. Illinois is one of the new sports betting states that requires bettors to register for mobile accounts in person.

But during the pandemic, Governor Pritzker got rid of that requirement. So, Illinois bettors have been able to register for sportsbook accounts from their phones. Online sportsbooks require part or all of your social security number to confirm your identity. It’s one of the ways licensed sportsbooks make sure they’re not awarding money to money launderers or terrorists.

One of the reasons Illinois online sports betting grew so fast may be because it was easy for bettors to create accounts. That’s where forecasting Illinois’ sports betting future becomes strange. Online sports betting growth will slow after the pandemic. However, it won’t be because bettors have to register in person. The sports betting industry will just mature and close in on its maximum size. If and when the in-person requirement comes back, Illinois sportsbook growth won’t be exploding from month to month. Many bettors will have already taken advantage of the quicker and easier signup process.

Illinois Online Sports Betting in a Nutshell

Illinois wasted little time between PASPA’s repeal and legalizing sports betting. Retail sports betting went live shortly before the coronavirus lockdowns. And online sports betting didn’t go live until late in the summer. But the first three months of data we have show an encouraging start. Five major sportsbook brands generated over $457 million in three months. The resulting $2.4 million tax bill is a little low, but time and market maturity will improve it. It’ll fund infrastructure and education projects and may sign bettors up faster during the pandemic than afterward.

If you’re interested in getting involved, check out our beginner’s guides to sports betting. Or, if you’re an Illinois resident, you can create an account at one of the five current Illinois sportsbooks:

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