Illinois Hearing Addresses Sports Betting, iGaming Initiatives

Illinois Hearing Addresses Sports Betting, iGaming Initiatives

© USA Today

Wagers on Illinois college teams, iGaming and in-person sports registration were some of the topics brought up during Wednesday’s Illinois Executive Committee hearing.

Supporters and opposition spoke during the Wednesday hearing with state representatives able to ask questions regarding the topics.

Here’s a rundown of what happened during the Illinois hearing:

Betting on Illinois Colleges

In February, Illinois State Rep. Michael J. Zalewski re-filed a bill that would remove a sports betting ban on Illinois colleges. It has been evident that college sports are a big draw for bettors in Illinois. In a meeting last week, Illinois Gaming Board Administrator Marcus Fruchter revealed the recent NCAA Tournament had a sports betting handle of $176.8 million with $14.6 million in revenue that would result in a minimum of $2.1 million in tax revenue. Those numbers from Fruchter didn’t include one operator that still had to report.

The handle and revenue could have been higher if Illinoisans could bet on the in-state teams taking part in the tourney, including Illinois and Loyola Chicago. If Zalewski’s bill eventually passes, residents within Illinois would be eligible to bet on in-state teams.

Zalewski highlighted during the meeting how Illinoisans are already betting on the schools in Illinois. He discussed how bettors are going across state lines to Indiana or Iowa to place wagers, or using offshore books or illegal books to get their bets in.

“We have a provision that doesn’t do what it was meant to do, and we have a smaller marketplace as a result,” Zalewski said.

One of the reasons athletic administrators are opposed to sports betting on in-state teams is the pressure and vitriol that can take place online from people who lose their wagers. Illinois Athletic Director Josh Whitman highlighted this as one of the reasons in-state college sports betting should continue to be banned.

“By allowing people in our state to bet on our student-athletes, we’re only opening the door and inviting people to have those intense, threatening abusive interactions with our student-athletes, and that’s something that myself and my colleagues strongly oppose,” Whitman said.

Zalewski also brought up an amendment added to his bill that would allow any university that feels a student is harassed or affected by a sports bet, it would set up a procedure where the university could petition the gaming board to suspend further wagering on that team.

“The amendment provides a better option,” Zalewski said. “I think it would both draw the immediate reaction of ceasing the behavior when bettors realize there could be no more bets. It would send out a signal that there needs to be better behavior.”

Trevor Hayes, head of Government Relations for William Hill, also spoke in support of in-state sports wagering. Hayes spoke to his experience in Nevada where he sits on the State’s Board of Regents, which is the policy and governance board where members are elected and serve UNLV and the University of Nevada. Hayes sat on the Athletics Committee responsible for both Division I athletic departments.

“In the six years I was on that committee or chaired that committee, there was not one problem with college sports betting in our programs,” Hayes said. “As far as I’m aware, there weren’t any problems in the 14 preceding years.

“The reality is there are apps in these kids’ hands today from overseas companies that are illegal. No one has to drive a half-hour to make a bet on any Illinois college team. They were doing it long before 2018 and they’ll be doing it afterward. You make it legal in Illinois to bet on it on legal apps, they won’t drive across the border. They’re going to download the app and use it right there.”

Rep. Jonathan Carroll also mentioned to Whitman how college athletes are already facing regular pressure due to wanting to perform and succeed on a regular basis.

Illinois iGaming

HB 3142 had its first reading on Feb. 19 before being referred to the Rules Committee. The bill would create the Internet Gaming Act and would add online casino games and online poker to the state’s gaming catalog.

Rep. Daniel Didech spoke in support of the bill, citing how a legalized online casino market could benefit players and result in increased revenue for the state.

“These illegal websites are highly predatory for problem gamblers and are advertised and operated without any regard for the safety of individuals who are struggling with gambling addiction,” Didech said. “On top of that, these illegal websites do not create taxes or create jobs and are a significant drain on the Illinois economy.”

Jeff Kaplan, vice president of Strategic and Financial Planning for Penn National Gaming, showcased the financial impact iGaming can have on states. Currently, Nevada, New Jersey, Pennsylvania, Delaware, Michigan and West Virginia have a form of online casino gaming. Nevada is the only state that allows just online poker, while Michigan is the latest to feature online casinos.

Kaplan used Michigan’s latest launch to highlight the potential for Illinois. Based on Michigan’s latest iGaming revenue of $95.1 million for March, Kaplan predicts the iGaming market will generate nearly $1 billion in revenue during the state’s first year of operation that has legalized iGaming. That mark would be a record for any state’s first year. Kaplan also projects Michigan’s market to exceed $1.5 billion annually, while Illinois has the potential to post even bigger numbers.

“Given the fact that Illinois’ adult population is 25% larger than Michigan’s and the median income is 15% larger, we expect the revenue opportunity in Illinois to be significantly higher than it is in Michigan,” Kaplan said.

Kaplan also pointed to a study his company did to see if iGaming was eating into the profits of brick-and-mortar casinos. According to him, the study found iGaming to be complementary to land-based casinos while being able to gear towards a new market.

“We found that iGaming play was almost entirely creative and complementary to our brick-and-mortar play,” he said. “In addition, we attracted a different type of customer online as our online database averages about 10 years younger than our brick-and-mortar players.”

In-Person Sports Betting Registration

On April 2, Gov. JB Pritzker decided not to extend remote registration, forcing Illinois residents who wish to wager on sports to register in-person at any of the casinos partnered with sportsbooks. Nearly every month since Pritzker issued an executive order on June 4, 2020, players in the state had been able to register remotely due to the coronavirus and closure of the state casinos.

March was the last month of remote registration, meaning we won’t know what the absence of remote registration means to the state until the release of the April gaming report.

Hayes voiced his support for remote registration, noting the geographic spread in Illinois is vastly different than Nevada, where casinos are prevalent.

“There is no need to have the people in Illinois to drive to registration,” he said. “Nationally, we see 75%-plus of our bets are made on mobile devices and in many states, it’s as much as 90%.

“In Illinois, the majority of players are playing on mobile. We have the procedures in place to authenticate the people gaming and have anti-money laundering standards in place, and we have responsible gaming in place. It’s been a success and I think it’s time to open it up.”

Aside from the narrow use case in Nevada, Illinois is now the only state that has in-person registration requirements. Iowa had it but eliminated the provision on Jan. 1. But opponents of remote registration defended the original intent of the gaming bill that required in-person registration. Proponents of in-person registration believe it boosts casino revenue. If lawmakers don’t take any further action regarding registration, in-person registration will remain in Illinois for the rest of 2021.

“As I look at all these different proposals, we’re going to carefully look at what’s best for Illinois, what’s best for our market and how we move forward,” said Rep. Bob Rita, who is the committee chairperson. “That’s the purpose of hearing all these panels today and getting the testimony and weighing it out as we move forward.”

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