A new report predicts that legalized Internet gambling would generate $273.3 million a year in new revenue for Illinois. A safer choice for Illinois state employees would be constitutional pension reform.
Experts predict Illinois may soon legalize internet gambling, allowing residents to wager on virtual casino games like slots and roulette while generating an estimated $273.7 million a year in new tax revenue for the state to collect.
A panel of executives from the East Coast Gaming Conference said Illinois, New York, Indiana and Iowa could all pass iGaming legislation soon. Illinois would be the seventh state to legalize online casinos.
The executives said that states like Illinois, which saw rapid growth in sports betting after legalization in 2019, already have the necessary infrastructure and regulatory systems in place to benefit from the games.
“They already have regulators in place,” said Richard Schwartz, CEO of Chicago-based online gaming company Rush Street Interactive. “They set up servers. It’s faster to launch a casino supplement.”
While the new report estimates that Illinois will generate $273.7 million in annual revenue from a mature internet gaming market, data from the American Gaming Association shows mixed results when it comes to actual state revenue.
Michigan reported raising $2 billion from internet gamblers since January 2021, dramatically beating predicted winnings. But Delaware has only generated $42.2 million from its virtual casinos in nearly a decade.
Illinois generated $1.36 billion in state taxes from gambling in fiscal 2021. New forms of gambling have tended to come at the expense of older forms, apart from the continued dominance of lottery revenue.
Illinois Senate lawmakers proposed legislation legalizing internet gambling in the 2021-2022 session in hopes of repeating the $1 billion windfall Illinois experienced by taxing sports betting.
Chicago’s leadership has also begun to support gambling as a source of new tax revenue for the city’s massive pension debt, and approved a $1.7 billion casino development in the River West neighborhood. City councilors have touted the project as optimistic of paying 9% of the city’s annual pension contributions.
But as with the River West development, the new revenue from legalized Internet gambling would be negligible compared to the savings if Illinois were to face its public pension problem. To do this, the Illinois Constitution must be amended.
A pension reform developed by the Illinois Policy Institute that would “keep harmless” would tie all cost-of-living pension adjustments to inflation rather than a fixed annual growth rate, saving the state more than $50 billion by 2045.
Right now, politicians are toying with Illinois state employee retirements, allowing pensions to eat up over 25% of the state budget as the amount these systems ultimately need grows to $313 billion.
Trying to fill that hole is a sucker bet. Constitutional pension reform is what Illinois needs.