Illinois Sports Betting Coming Together In Last Days Of Session — Live Updates
This is a developing story and will be updated throughout the day.
If Illinois is going to legalize sports betting this year, it’s probably going to have to happen today. Or this weekend, but Friday was to be the last day of the 2019 session until a bad-news bulletin extended the timeline through Sunday.
Lawmakers began the day behind closed doors, working to finalize a framework for IL sports betting.
Most presumed S 516 would serve as the vehicle, a Chicago casino bill that appeared to be a suitable target for the enabling language. A midday curveball, however, shifted the focus to a different bill just a couple steps from the finish line.
Here's a chronological timeline of the developments in Springfield with adjournment lingering.
A new vehicle for IL sports betting?
Joe Ostrowski is a Chicago radio anchor who's had his ear to the ground this week, and he's the first to reveal that everyone is looking in the wrong place.
Some optimism in Springfield for sports betting.
SB 690 should drop very soon.
— Joe Ostrowski (@JoeO670) May 31, 2019
The bill he references (S 690) is not a gambling bill, but a measure amending tax provisions in the Invest in Kids Act. The current version has already cleared the Senate and awaits a floor vote in the lower chamber. Suddenly, some expect House lawmakers to file a new amendment related to sports betting.
Sure enough, a placeholder pops up on the docket, with a hearing in the House Executive committee scheduled for 1:30 p.m. local time. A change of sponsor to Sen. Terry Link provides another indication that something is about to happen.
Lawmakers are an inventive bunch, but it's surprising to see such a wide attempt at an end-around. LSR sources indicate that there is good reason to monitor the conversation all the way up until the last gavel.
New IL sports betting amendment
Here's the language Rita filed just before 1 p.m. (start on page 138):
What's in it?
It will take us a while to read through all 716 pages, but it includes a comprehensive gambling package featuring a super-casino in Chicago. The bill includes six available categories of licensure for IL sports betting:
- Master sports wagering
- Management services provider
- Tier 2 official league data provider
- Central system provider
These categories allow casinos, race tracks, and sports venues to offer sports betting both in-person and online. The provisions that concern online betting, however, require in-person registration for the first 18 months.
The amendment also authorizes a lottery implementation encompassing around 2,500 locations.
Digging into the details
The fee for a master sports betting license is calculated based on gross gaming revenue from the previous year. Casinos will pay 5% of that number to offer sports betting for four years, up to a maximum of $10 million. That cap, not present in recent versions, will ease the burden on large operators like Rush Street Gaming. Rita also softened the proposed tax rate down to 15% of revenue.
As you can infer from the categories, language mandating the use of official league data for in-play betting stuck. While there is no integrity fee, the bill does empower colleges and sports leagues to restrict the types of available wagers. As written, in-state collegiate sports are completely off the board in Illinois.
The amendment removes the total blackout period for online betting that snuck into an earlier version, but it does retain a modified penalty box for DraftKings and FanDuel. Daily fantasy sports companies would be allowed to compete in the market, but only by initially partnering with a master licensee.
The amendment also creates three online-only licenses costing $20 million apiece, awarded on an 18-month delay via a competitive process.
Senate Appropriations committee hearing
Sen. Link presents the amended bill to the committee, and … boy, is there a lot in it.
In addition to the gambling provisions, it also touches on taxes for cigarettes, parking, video lottery terminals, and a number of other mechanisms to increase state revenue. The total fiscal impact is close to $1 billion, with sports betting representing just a tiny component of the package.
It is the quickest of hearings, over in less than five minutes. One member inquires whether or not the bill increases the number of slot machines for each casino licensee — it does — and that's about it.
House Executive committee hearing
A heated floor debate on a marijuana bill (which ultimately passed) delays the House hearing by several hours.
When the committee finally convenes, Rep. Mike Zalewski is a surprise addition to the dais at the front of the room. Although the long-suffering proponent of IL sports betting recently stepped back from the spotlight, Rita's bill still lists him as the primary House sponsor. The committee substitutes Zalewski in as a temporary member to cast a vote in favor of passage.
Without much lead time, the amendment attracts 34 proponents and nine opponents (which later grows to 18). Casino groups including Boyd Gaming, Penn National Gaming, and the Illinois Casino Association remain opposed to the final gaming language.
Members of the committee have plenty of questions, but the bulk of the conversation centers around gaming provisions not related to sports betting. Rita struggles a bit to explain some of the finer details, particularly as they relate to DraftKings and FanDuel. It's complicated, in fairness.
The language allows online platforms, but online-only companies can not seek licensure for the first 18 months of IL sports betting. The sponsor indicates he constructed his bill in such a manner to “give Illinois companies a ramp” into the new industry. Rita also notes that his amendment will not affect the existing status quo for DFS.
The committee recommends adoption of the amendment by an 8-5 vote, and they'll deal with the rest on the floor shortly.
Previously, in Illinois sports betting …
This year's attempt to legalize sports betting follows in the footsteps of the failed 2018 effort.
As it did last year, work began early in 2019. Lawmakers cobbled together a variety of possible frameworks, each catering to a particular group of stakeholders. Once again, however, nothing broadly palatable had emerged as the last few hours of session ticked off the clock.
The proposed budget from Gov. J.B. Pritzker includes $217 million in revenue from sports betting, so there's more at stake than just the freedom to wager. Failure would force Illinois to watch from the sidelines while its neighbors in Indiana and Iowa activate their new laws.
Who can participate?
The concept of the “penalty box” is the biggest hurdle to a passage at the moment.
To make a long story short, some casino groups are working to keep DraftKings Sportsbook and FanDuel Sportsbook out of the Illinois market. They argue that daily fantasy sports is not explicitly legal in the state, and these so-called bad actors should be excluded from licensure for three years. The real motivation is, of course, a desire to eliminate competition from the two companies running away with the New Jersey sports betting market.
DraftKings responded by briefly running a television campaign pushing back on the obstruction from Rush Street Gaming.
How much will it cost?
The sports leagues have also gained more leverage with Illinois lawmakers than they have elsewhere in the country.
All current proposals for IL sports betting include payment of an integrity fee and a requirement to use official league data to settle wagers. No US sports betting law includes and integrity fee, and Tennessee is the only one that has included a data mandate.
Coupled with licensing fees topping out at $25 million and taxes amounting to 25% of revenue, these operational burdens may stand between the bill and the finish line.
Who's in charge?
Rep. Mike Zalewski carried the baton all spring, but a lack of progress and a perceived conflict of interest forced him to step aside in the 11th hour.
Start-of-day intel indicates that Rep. Bob Rita is actively working to stuff the enabling language into the broader gambling package before lawmakers head home for the year. In what could be seen as an encouraging sign, Senate Republican Leader Sen. Dave Syverson has signed on as a co-sponsor.
There's no guarantee that bill passes, though, and it may not include sports betting provisions even if it does.
Reporting from Matt Kredell contributed to this story.
The post Illinois Sports Betting Coming Together In Last Days Of Session — Live Updates appeared first on Legal Sports Report.
Andy has been writing and posting about offshore sportsbooks for over 15 years. He's also an active sportsbook bonus seeker and seasoned online gambler on US sports.
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