With the kick-off of the NFL and college football seasons in September, sports betting surged in Illinois and beyond. Sports bettors placed hundreds of millions of dollars in wagers, despite the state’s in-person registration requirement. But, that in-person inconvenience might be over in time for new bettors to get in on the March Madness action.
Figures released for September by the Illinois Gaming Board show the state’s sports-betting handle was more than $596 million. That’s nearly 50% more than the more than $400 million handled in August. It’s also a hefty 95% year-over-year increase compared to September 2020.
As you might expect, most of September’s games were placed at online sportsbooks. In fact, Illinois sports bettors placed close to $570 million in sports bets online. In comparison, in-person sports betting only accounted for around $26 million.
It’s not surprising that sports betting giant, DraftKings, handled most of Illinois’ bets for September. The online sportsbook handled over $236 million in both online and retail bets.
The adjusted gross revenue for all Illinois sportsbooks for September totaled close to $40 million, for a hold of nearly 7%.
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Football Fans Drive Traffic
Driving the increase in traffic to Illinois sportsbooks was the kickoff of the NFL’s regular season, as well as the start of college football. Bettors in the state wagered more than $230 million on football during September, annihilating the $17 million in football wagers during August.
The increased action in Illinois came despite the in-person registration requirement for the state’s online sportsbooks; bettors must go to a brick-and-mortar casino to sign up for an online operator, such as DraftKings or FanDuel. Fortunately, that requirement could soon be a thing of the past.
In late October, the Illinois General Assembly passed HB3136, which includes a sunset clause for the in-person registration requirement. That requirement ends on March 5, 2022, or when the first online-only sportsbook license is issued in the state, whichever is first. But, with March fast approaching, it’s likely to happen on March 5, 2022.
HB3136 would also eliminate another restriction on sports betting by allowing in-person pre-game, wagers on the outcome of the state’s college games. Currently, these bets are not allowed, but by July 1, 2023, they will be.
But, the legislation has not yet been signed into law by Governor Pritzker; Pritzker had dropped the in-person registration requirement for a few weeks during the COVID-19 lockdown which he mandated. The in-person registration requirement reappeared in April, 2021.
The in-person requirement was put in place to give the state’s casinos more foot traffic, and thus, more business. But, last August, the Illinois Gaming Board launched an application process for three coveted online-only sportsbook licenses. That application period ended on December 3, 2021.
Illinois Loves Sports Betting
Despite the restriction, Illinois will undoubtedly continue to remain at the top of the list for legal sports betting states. According to GeoComply Solutions, a company which helps online sportsbooks determine whether bettors are in a state, Illinois ranked fifth with geolocation transactions. Only New Jersey, Michigan, Pennsylvania, and Arizona had more sports betting transactions. Those states do not require in-person registration, which shows how enthusiastic Illinois bettors are.
It’s no wonder that New Jersey tops the list, being the first state to legalize sports betting. In October, New Jersey became the first state to rake in more than $1 billion in online sports betting handle in a single month. But Illinois was close, with $840 million in handle for October. When it comes to aggregate sports betting handle, Illinois takes second place, right behind New Jersey. Since its legalization, Illinois sportsbooks have handled more than $5 billion.
While Nevada has the country’s biggest land-based sports betting market, it still lags behind New Jersey, Illinois, and Pennsylvania when it comes to mobile sports betting. But, Nevada has seen a sharp jump in mobile betting since August. As more states legalize sports gambling, the race to the top is sure to intensify.
Chicago Proposes Additional 2% Tax on Potential Sportsbooks
The Chicago City Council is considering a 2% tax hike on retail sportsbooks operating with the city limits. That would bring the total tax on bets placed in-person within the city to 19%. The rate is 17% in other parts of Cook County and 15% in other parts of the state. This would effect the planned 22,000-square-foot DraftKings sportsbook at Wrigley Field.
However, as of now, there are no retail sportsbooks in the city. While the mayor supports the move, some city alderpersons do not. In particular, Aldermans Mitchell, Moore and Cardenas want more information on how retail sportsbooks could impact their communities.
For example, Cardenas is unhappy that the proposed sportsbook ordinance does not include any requirement to include minority owners. He feels that the owners of Chicago’s major professional sports teams could dominate the sports betting industry in Illinois, excluding minority businesses. Alderman Mitchell feels that retail sportsbooks could have a negative impact on the Black community.
It’s all up in the air for now, but retail sportsbooks with a 19% tax rate could soon make their appearance in the Windy City.
