Legalisation moves in Illinois?

Illinois, which has in the past flirted briefly but unsuccessfully with online gambling proposals , could be about to take a serious run at legalisation as part of a bill expanding land gambling options in the state.

Sen. Terry Link, a Waukegan Democrat, filed legislation titled SB1739 to expand gambling this week in the Senate Executive Committee despite prior reservations expressed by Gov. Pat Quinn, according to several reports in local newspapers originating from the Associated Press news agency.

Importantly, Link included in his amended bill a provision for internet gambling regulation and licensing in Illinois.

Link’s measure has a way to go yet and faces some stiff opposition, but backers were predicting Wednesday that it could come up for a full Senate vote as early as today (Thursday).

It proposes the authorisation of land casinos in Chicago, Rockford, Danville, Chicago’s south suburbs and Lake County.

It would also allow current and future land casino licensees to apply for an intrastate online gambling licence.

The online gambling provision would allow people in Illinois to play table games such as poker and black jack over the Internet, but sports betting is specifically excluded.

Online profits would be split, with $10 million going toward treatment programs for problem gamblers, $5 million to the State Fairgrounds and the remainder to the state’s public pension systems.

The proposed bill appears to make provision for interstate compacts by permitting agreements with other gaming entities, including foreign entities:”…provided no state or federal laws are broken.”

SB1739 calls for the introduction of a State Division for Internet Gaming, which would be responsible for licensing and regulation. Licenses would be valid for five years, and applicants would be required to ante up $250,000 as a non-refundable application fee.

A rather high tax rate of 20 percent of GGR is proposed with a lower rate of 15 percent on poker rake for online poker operators, and successful applicants would be required to deposit $20 million with the state to ensure tax compliance.

Servers must be based within state borders.

Tax payable on the initial five year period of a licence for casino games is sweetened by levying only 10 percent on the first $200 million in GGR, rising to the standard 20 percent on revenues in excess of that number.

The same discount is applied to online poker licensees, who in the first five years will pay 7.5 percent on GGR below $200 million, rising to the standard 15 percent above that amount.

In common with other US states, the Illinois proposal envisages only holders of state gambling licenses being eligible for online gambling licenses, and that commercial protection is further extended by a “bad actor’ clause which prohibits the licensing of any entity that has accepted wagers via the Internet in contravention of United States law in the 10 years preceding the application date.

With almost 13 million residents, Illinois competes with Pennsylvania as one of the most populous states and in the event of legalisation could be a prime target for other states wishing to build a bigger player pool.

Link said Wednesday that the gambling expansion from brick-and-mortar casinos could generate between $400 million and $1 billion for the state. The bulk of the money would be allocated to the state’s Education Assistance Fund, after the local communities receive a share of the profits.

The bill also would authorise 1,200 new slot machines in Cook County and another 900 outside that county. The operator of a Chicago casino also would be eligible to apply for up to 4,000 slot machines to be located at Midway and O’Hare international airports.

The first $50 million generated from application and licensing fees, as well as the per-slot machine fee that operators must pay, would go to the Illinois Gaming Board. The remainder would be used to cover part of the state’s debts, currently at around $9 billion.

Gov. Quinn has history for vetoing gambling expansion plans in his state, and has urged lawmakers to close the door on political contributions from gambling companies, a measure which has been approved in committee.

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