A new report predicts legalized internet gambling would generate $273.3 million a year in new revenue for Illinois. A safer bet for Illinois’ state workers would be constitutional pension reform.
Experts predict Illinois could soon legalize internet gambling, allowing residents to bet on virtual casino-style games such as slots and roulette while raising an estimated $273.7 million a year in new tax revenue for the state.
An East Coast Gaming Conference panel of executives said Illinois, New York, Indiana and Iowa could all pass iGaming legislation soon. Illinois would be the seventh state to legalize online casinos.
The executives said states such as Illinois, which saw rapid growth in sports betting after legalizing it in 2019, already possess the necessary infrastructure and regulatory systems to profit off the games.
“They already have regulators in place,” said Richard Schwartz, CEO of Chicago-based online gambling company Rush Street Interactive. “They have servers in place. It’s quicker to start up a casino addition.”
While the new report estimates Illinois will generate $273.7 million in annual revenue from a matured internet gambling market, American Gaming Association data shows mixed results in terms of actual state revenues.
Michigan reported collecting $2 billion from internet gamblers since January 2021, drastically surpassing predicted profits. But Delaware over nearly a decade has only generated $42.2 million from the virtual casinos.
Illinois in fiscal year 2021 generated $1.36 billion in state taxes from gambling. New forms of gambling have tended to come at the expense of older ones, except for the continued dominance of lottery proceeds.
Lawmakers in the Illinois Senate proposed legislation in 2021-2022 session to legalize internet gambling, hoping to replicate the $1 billion-dollar windfall Illinois experienced by taxing sports betting.
Chicago leaders have also started endorsing gambling as a source of new tax revenue for the city’s massive pension debts, approving a $1.7 billion casino development in the city’s River West neighborhood. Aldermen have touted the project as optimistically paying for 9% of the city’s annual pension contributions.
But like the River West development, new revenue from legalized internet gambling would be negligible compared to savings were Illinois to confront its public pension problem. To do that, the Illinois Constitution must be changed.
A “hold harmless” pension reform developed by the Illinois Policy Institute would tie all pension cost-of-living adjustments to inflation rather than a fixed rate of annual growth, saving the state more than $50 billion by 2045.
Right now, politicians are gambling with the retirements of Illinois’ state workers by allowing pensions to eat over 25% of the state budget as the amount those systems will eventually need balloons to $313 billion.
Trying to fill that hole is a sucker bet. Constitutional pension reform is what Illinois needs.