The Illinois casino industry has seen better days, with the combined gaming profits plunging by $200 million over the past decade or so. Figures from the Illinois Gaming Board (IGB) paint a slightly grim picture, as the casino revenue in the state plummeted from $340 million in 2012 to $140 million in 2022.
The downward trajectory of the casino profits is a huge blow to the Illinois economy, which has for decades relied on the industry to generate money for its coffers and put more Illinoisans at work. Sports betting and video gaming terminals have been garnering more and more traction among bettors in Illinois, which may help explain the decline in demand for casino gaming.
Analysts think that cut-throat competition from neighboring states (especially Michigan and Indiana), the shifting economic landscape, and the meteoric rise of online gambling are to blame, as well.
The news comes as Chicago gears up to welcome its first permanent casino property. The state projects that Bally’s Chicago will rake in over $800 million in gaming revenue by 2028 and may help offset the declines that its existing land-based counterparts have been experiencing since 2012.
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More wagering options available to bettors is likely the reason for Illinois casinos’ revenue decline
Before 2012, Land-based casinos offered pretty much the only form of legal gambling in Illinois. Nowadays, Illinoisans have access to a myriad of other gaming types that weren’t available to them back in 2012.
This emergence of other legal forms of gambling could be one of the biggest reasons for the dwindling casino revenues in the Land of Lincoln. This is especially true after the concerted efforts by the lawmakers and governor’s office to expand legalized gambling in the state.
A case in point is the Illinois Supreme Court decision in August 2011 to rule that the passing of the bill HB 255 didn’t violate the “single subject” clause of the state’s law. The so-called Video Gaming Act – which was initially signed into law in May 2009 – sought to authorize the use of video gaming machines in licensed places outside casinos, such as veteran’s halls, fraternal buildings, truck stops, and airports.
After the 7-0 decision by the Supreme Court, video gaming terminals have mushroomed across the state, allowing bettors to wager on their favorite slots and video poker machines in restaurants, barber shops, and even local pubs. These local spots provide Illinois players with a more convenient and accessible gaming experience than traditional casinos.
The number of video gaming terminals ticked up by 43,000 in 2022 alone. Revenues pulled in by these machines have equally skyrocketed to $762 million in 2022, a nearly twofold hike from $395 million in 2019.
Land-based casinos in Illinois are also vying for bettors with a growing number of online counterparts. The online casino space in the Land of Lincoln is solidly dominated by BetMGM, FanDuel, Caesars Online Casino, and DraftKings, with BetRivers Casino, Golden Nugget Online Casino, BetAmerica Casino, WynnBET Casino, PointsBet, and TwinSpires battling for the crumbs.
Illinois online casino casinos perked the IGB coffers up with around $196.5 million in 2022, which is a little shy of the decline in profits experienced by their brick-and-mortar counterparts since 2012.
Online lottery and horse racing have also witnessed a rise in their popularity among Illinois gamblers. Lottery gaming revenues have increased by almost 18% since 2012 to reach $833 million in 2022.
Sportsbooks are eating into Illinois casinos’ revenue pie
Sports betting is also giving the casino industry in Illinois a run for its money. Online sportsbooks have particularly gained traction among bettors since online wagering began in Illinois on June 18, 2020.
The social distancing regulations imposed due to the recent coronavirus pandemic were a blessing in disguise for the seven online sportsbooks in the Land of Lincoln. Their revenues have soared in tandem with their popularity, slightly beating out casino profits in 2022 $142 million to $140 million.
The total wagers handled by Illinois sportsbooks have surpassed $1 billion in 5 of the last seven months. They have generated more than $2.75 billion for the Common School Fund and other special projects in Illinois to date.
The sports betting market in Illinois saw a handle of $839 million in April 2022 alone. That placed Illinois as the third-largest sports betting market in the country, only trailing Nevada and New York.
However you look at it, the rise of sports betting is clearly one of the most prominent reasons for the decline in casino gaming revenue in the state. FanDuel and DraftKings – the duo that commands 66% of the sports betting market share in Illinois – have raked in lifetime revenues of $644,831,649 and $450,490,364, respectively.
In April 2023, the three major sportsbooks in Illinois – DraftKings, FanDuel, and Betrivers – generated more than $680 million in the book handle. That’s more than five times the adjusted gross revenues generated by casinos statewide.
Chicago is still betting big on casino gaming
The casino industry has long been a significant contributor to Chicago’s economy, but recent reports show that profits have taken a significant hit. But with a $200 million drop in casino profits in the state since 2012, many are wondering what the future holds for the industry.
Despite the decline in profits, the city of Chicago is still banking on the casino industry to provide a much-needed boost to its economy.
Bally’s is set to open a new casino in the city’s River West neighborhood, with the temporary casino at Medinah Temple awaiting official approval to open this summer.
The city hopes that Bally’s Chicago casino could provide up to $200 million in income for the Windy City, although this money is earmarked for emergency service pensions. Of course, the reality is that casino taxes are a drop in the bucket compared to the city’s $48 billion in unfunded pension debt.
To make matters worse, Mayor-elect Brandon Johnson has said that the city would first need to legalize video gambling to incorporate video poker, slots, and other terminals into the new casino.
Despite this, Johnson’s spokesman has stated that he is a supporter of legalized video gambling as an important revenue source for critical investments in affordable housing, transportation, and public safety.
Wrap-up
Casinos in Illinois have seen a marked $200 million dip in their combined gaming revenues since, although overall gaming revenue in the state increased more than 39% year over year to $1.9 billion in 2022. Most analysts attribute the rise of online gambling, sports betting, and video gaming terminals to the decline. Despite this, the city of Chicago is in full gear to launch its much-anticipated Bally’s casino.
