The Illinois state legislature legalized sports betting in June. Three months later, there’s been little progress — at least publicly — toward the end goal of going live, and multiple stakeholders around the country suggest that the legislature could have more to say on the topic in late October when it convenes for its annual veto session, used to revisit any legislation the governor vetoed and other pending issues. This year’s session is set for Oct. 28-30 and Nov. 12-14.
While no sports betting proposals have been filed ahead of the veto session, the Illinois Gaming Board’s public-comment period on sports betting closes Friday. The IGB took the unusual route of opening a public-comment period ahead of rolling out proposed regulations on sports betting. In every other state with legal sports betting, the regulatory body has sought public comment after proposed rules were published.
But IGB Administrator Marcus Frutcher in an August press release called the public-comment period “an important step in a process to ethically and expeditiously establish a regulatory framework to allow sports wagering in Illinois. In order to make the process of rule creation as transparent and independent as possible, it is important that the public and various stakeholders have an equal opportunity to submit comments.”
On Thursday, an IGB spokesman said the board had no comment with regard to sports betting or the public-comment period. According to the August press release, the agency will post the public comments on its website in “a timely manner.”
One stakeholder suggests that state politicians and the IGB may be using the early public comment period as an “impetus” to revisit sports betting during the veto session. The bill that became law over the summer isn’t exactly what lawmakers had initially envisioned, and was ultimately tacked on to a massive capital bill.
Original sports betting sponsor Mike Zalewski and overall gaming sponsor Bob Rita both offered up bills that were initially significantly different than the one that passed. From a stakeholder perspective, there are several key aspects of the bill that aren’t appealing — the $10 mm licensing fee, the 15 percent tax rate, the mandate to use “official league data” and the 18-month waiting period that was imposed on stand-alone mobile sports betting apps.
“I generally think people will want expanded access via online as soon as possible along with a lack of tethering to a bricks-and-mortar facility,” Zalewski said via text on Thursday. “That’ll be the sentiment I expect most.”
Here’s a quick look at each issue:
$10 mm licensing fee: The only other state with a fee that high is is Pennsylvania. The state initially made 13 licenses available, and not all have been claimed.
15 percent tax rate: The rate was 20 percent in the initial bill, so this is lower than first proposed, but still above the 10 percent that many operators see as manageable.
Official league data: The bill requires to-be operators to obtain/purchase “official league data” to settle Tier II and Tier III — basically in-game wagers. This remains a highly controversial topic.
18-month mobile delay: This may have been the biggest political tug-of-war in the whole bill. Following claims from Rush Street Interactive that daily fantasy and sports betting titans DraftKings and FanDuel had been operating illegally in Illinois, Rush Street asked for a “regulatory waiting period” first just for DraftKings and FanDuel, but later for all mobile-only operators. The initial ask was for three years. The operators felt there should be no such waiting period. In the end, lawmakers settled on 18 months.
Should the public comments reveal that key stakeholders have major issues with any of the above, it could be a reason for lawmakers to consider reexamining the bill. Another compromise was the college carve out, meaning that sports betting on Illinois college teams or college events that take place in Illinois is prohibited. Bettors will be able to wager on other college teams, including nearby Notre Dame in Indiana.
In Indiana, where sports betting was legalized in May and went live in late August, patrons can bet on the Fighting Irish. Along with Iowa, the Hoosier State was able to get from legalization to launch in about three months. The speed with which both states moved has put some pressure on Illinois, which legalized about six weeks later, but is still early in the regulatory process.
Both Iowa and Indiana legalized state-wide mobile sports betting. Some Iowa mobile apps are already live, and the first Indiana app, from Rush Street Interactive, is set to launch on Oct. 3.
Illinois residents are already crossing the border to place bets, and the longer it takes Illinois to go live, the more that culture will become ingrained. And, the longer it takes, the more Illinois sports betting dollars will continue to flow out of state.