Fair Gambling Advocates Allege "Dubious Claims" by Sportsbook Companies in Illinois.
Illinois Governor J.B. Pritzker (D) is seeking to raise the state's sports betting tax from 15% to 35% in order to generate more funds. However, this proposal is not well-received by the gaming industry, which the Campaign for Fairer Gambling (CFG) says is using "dubious claims" to fight against the plan.
The CFG, an independent wagering reform organization, claims that the Sports Betting Alliance (SBA) is using outdated tactics and has not provided any evidence to back up their arguments. Derek Webb, the founder and funder of CFG, stated in a statement, "Pushing a fantastical narrative and then collecting signatures to claim a mandate isn't a pretty picture. Global gambling conglomerates are skilled at presenting sports betting as a stepping stone before the inevitable floodgates open. Sports betting can lead to other forms of gambling like slots and table games, both of which produce more revenue - and harm."
CFG suspects that SBA's petition drive, which counts the support of BetMGM, DraftKings, FanDuel, and Penn Entertainment among others, may have been carried out under false pretenses. If Illinois were to implement a 35% tax on sports betting, it would rank as the third-highest rate among large states after Pennsylvania (36%) and New York (51%). In 2021, Illinois sportsbooks had $11.6 billion in wagers, with a hold of 8.6% generating $150 million for the state.
According to CFG, the 8.6% hold is slightly above the national average of 8.4%, but doesn't support SBA's claims that higher taxes would lead to worse odds for bettors. CFG points out that New York's higher tax rate hasn't impacted the hold, which would only change if odds shifted. This directly contradicts SBA's contention that higher taxes would result in poorer odds for players.
In addition, Delaware, New Hampshire, and Rhode Island also have a tax rate of 51% for sports betting.
A potential alternative to increasing the sports betting tax is the possibility of iGaming. The SBA says that allowing online casinos would create a new revenue stream for Illinois. They recently completed a study showing that land-based casino revenue in Illinois, Louisiana, Maryland, New York, and Virginia would rise moderately if iGaming was legalized in these states. This could be an attempt to dispel concerns that online casinos would negatively affect physical casinos.
While the SBA estimates that iGaming could generate $750 million in new revenue for Illinois, more than triple the money that would be earned by increasing the sports betting tax, the state is not yet moving forward with Online casino legislation.
Regardless, Illinois is in desperate need of funds. For the new fiscal year beginning in July, the state is projected to have a budget deficit of $891 million, or $721 million after accounting for a $170 contribution to their "rainy day" fund. This would be the first deficit in four years. Pritzker's latest proposed budget totals $52.7 billion, up from $40 billion in 2019.
Source: PlayIllinois
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Source: www.casino.org
