Last week reportedly saw members of the Illinois State Senate overwhelmingly pass a piece of proposed legislation that would legalize online gambling and daily fantasy sports for residents of the Midwestern state.
According to a report from the Chicago Tribune newspaper, the proposal was ratified by the Democratic-controlled upper house by a vote of 42 to ten and is now due to be scrutinized by the Illinois House Of Representatives from Thursday. The newspaper reported that the legalization of online gambling and daily fantasy sports could help the state of 12.8 million people to plug its estimated $9.6 billion budget deficit although the legislation is set to face opposition from many quarters including Michael Madigan, the veteran speaker for the lower house.
If passed as written by the Illinois House Of Representatives and subsequently signed into law by Republican governor Bruce Rauner, the legislation would reportedly legalize online casino and poker games under the supervision of a new Division Of Internet Gaming, which would be administered by the Illinois Gaming Board.
The Chicago Tribune reported that only the state’s current licensed casino and horseracing operators would be able to apply for an online gambling license while the latter must have conducted at least 30 days of live racing in 2016. Remote advance deposit wagering firms could also be eligible so long as they had processed a minimum of $1 million in Illinois-based handle last year with successful applicants required to deposit $10 million against any future tax obligations.
The newspaper detailed that the proposed Illinois legislation would require online gambling operators to pay a 15% tax on gross gaming revenues although the first five years would see the initial $100 million taxed at only 10%. Firms would moreover be limited to “not more than two Internet gaming skins” with each required to “reflect a brand owned by the licensee or any affiliate of the licensee in the United States” while an affiliate would be defined as any person that “directly or indirectly through one or more intermediaries controls, is controlled by or is under common control with a licensee”.
Regarding online technology vendors, the legislation would reportedly establish a license fee that could not exceed $250,000 while bad actors would be defined as any vendor that had “accepted wagers via the Internet in contravention of this act or in contravention of any law of the United States”.
The newspaper reported that in terms of daily fantasy sports, the measure passed by the Illinois State Senate would see operators required to pay a 5% tax on their first $1 million of revenues before a sliding scale kicked in that established a 7.5% rate on any additional earnings up to $3 million. A 10% revenues tax would apply to anything between $3 million and $8 million with the rate for any additional takings set at 15%.
Application fees for one of the Division Of Internet Gaming’s daily fantasy sports licenses would reportedly be based on revenues with firms that take in over $10 million a year required to hand over $25,000. For those racking up revenues between $5 million and $10 million every year, a $12,500 fee would apply while this would eventually bottom out at $500 for those with annual revenues of less than $100,000.
Finally, the newspaper reported that annual license fees for Illinois daily fantasy sports operators would follow a similar pattern with prices ranging from $1,125 for the smallest firms up to $50,000 for the top earners.