Illinois Lawmakers Renew Efforts to Legalize Online Casinos

Less than a month after Illinois Governor JB Pritzker voiced his support for the legalization of online casinos, lawmakers have revived their efforts to expand gambling in the state, with a renewed push that could have significant budgetary implications. With Illinois grappling with a projected $3 billion budget deficit, the timing of these bills could be pivotal in determining their success.

 

A Familiar Push with New Urgency

Illinois lawmakers, led by Rep. Edgar González, Jr. and Sen. Cristina Castro, have filed new bills to legalize online casinos, marking the latest in a series of legislative efforts stretching back to 2021. The proposals—HB 3080 in the House and SB 1963 in the Senate—are identical to those introduced in the previous two legislative sessions, but the renewed focus on them in 2025 is driven by Illinois’ worsening financial outlook and the Governor’s endorsement of the initiative as a potential revenue source.

Pritzker’s comments in January about considering the expansion of gambling to ease the state’s budget deficit signal a shift in the conversation. The governor has not fully endorsed iGaming, but his openness to it suggests a change in political dynamics that could give Castro and González’s bills a better chance at passage.

The new bills mirror the proposals of years past, aiming to create a regulated framework for online casinos in Illinois. Under the proposed “Internet Gaming Act,” each licensed gaming operator in the state would be allowed to operate up to three online casino brands, or “skins.” The legislation stipulates a 25% tax on the adjusted revenue generated by online gaming, which could include online poker, slots, table games, and live-dealer games.

The bill provides flexibility in how these skins can operate. Operators could use their own branded products or partner with other companies to run the platforms, similar to how the state’s online sports wagering system works.

One notable feature in this iteration of the bill is the inclusion of a workforce provision: license renewals would be contingent upon staffing levels at physical gaming establishments. Specifically, if a licensed facility experiences a workforce reduction of 25% or more, that license would not be eligible for renewal. This clause could help address concerns about job security, particularly from unions representing hospitality workers.

Revenue generated from the tax would be earmarked for the State Gaming Fund, which covers the cost of regulating gambling in Illinois and provides funding for education in the state—a key selling point in the debate.

 

An Obstinate Opposition: The Lobbying Power of Video Lottery Terminal Operators

Despite the potential for significant new revenue, the path forward for online casino legalization is not without significant hurdles. Illinois has a thriving video lottery terminal (VLT) market, where businesses such as bars and restaurants host slot-like machines, sharing revenue with operating companies. These companies, which are highly invested in Illinois’ VLT system, could mount strong opposition to online casino expansion, fearing that the new market will siphon off revenue from their existing contracts.

While there is potential for new tax revenue, opponents of iGaming argue that the shift to online gambling could harm their businesses, particularly in the context of the VLT market, where businesses and operating companies have established contracts that they may seek to protect.

The proposed legislation’s focus on workforce protections—such as the requirement for gaming operators to maintain staffing levels at their brick-and-mortar locations—may be an attempt to address concerns from unions and other labor groups worried about job losses. However, the issue of competition with existing gambling outlets could remain a tough barrier to overcome.

A Budding Opportunity Amid Fiscal Crisis

While opposition from industry stakeholders and labor unions is likely to present a challenge, the fiscal crisis facing Illinois could work in favor of online casino legalization. With a $3 billion budget deficit and limited avenues for revenue growth, Castro and González see the legalization of iGaming as an essential step to help alleviate the state’s financial pressures.

In speaking with the Chicago Sun-Times, Castro highlighted the importance of online casino revenues in addressing Illinois’ budget shortfall, emphasizing that the gambling expansion could offer a significant new funding stream for education and state services. This framing, alongside the growing budget crisis, could serve as a powerful argument in the bills’ favor.

 

Online casino revenue could be a critical piece in addressing Illinois’ $3 billion budget deficit

 

A Long Road Ahead

Despite their optimism, González and Castro are not unfamiliar with the difficulties of passing such legislation. Previous attempts to legalize online casinos in 2023 and 2024 fell short, unable to clear the various hurdles posed by opposition groups and internal legislative resistance.

This third attempt, however, comes with a sense of urgency, with Illinois lawmakers now forced to reckon with a much more pressing budget gap. The next few months could be critical in determining whether Illinois will take the step toward online casinos. If successful, the move could reshape the state’s gambling landscape and provide much-needed revenue in a time of financial strain.

Ultimately, the fate of these bills may hinge not just on political calculations but on whether lawmakers can balance the competing interests of industry stakeholders, labor groups, and the need for urgent fiscal solutions. As the legislative process unfolds, all eyes will be on Springfield to see if the third time is indeed the charm for Castro and González’s iGaming efforts.