iGaming Faces Steep Opposition in Illinois

Illinois has joined the growing list of states considering the legalization of online casinos this legislative session. State Representative Edgar Gonzalez and State Senator Cristina Castro have once again introduced bills in their respective chambers to bring iGaming to the Land of Lincoln.

However, the road ahead remains challenging. Last year, similar proposals stalled in committee, and while the state's $3.2 billion budget deficit looms large, the odds of passage remain uncertain. In a notable change from last year, Senate Bill 1963 proposes a significantly higher tax rate of 25%, up from the previously suggested 15%, in an apparent effort to make the bill more fiscally appealing.

If passed, the legislation would allow each of Illinois' 16 land-based casinos to offer up to three online gaming "skins," paving the way for numerous iGaming operators to enter the market. The bill has been sent to the Assignments Committee, but no public hearing date has been set.

Opposition From Powerful Industry Players

The biggest hurdle for iGaming in Illinois is the same one seen in other states: opposition from entrenched casino and gaming interests concerned about potential cannibalization of their businesses.

Illinois presents unique challenges to legalization, including the impending launch of Bally’s flagship Chicago casino. The $1.4 billion project, set to open in September 2026, will feature 3,400 slot machines and roughly 170 table games. The key to its viability lies in its exclusive status as Chicago’s only casino, despite competition from resort-style casinos within a 30-mile radius.

Chicago has also largely kept out the widespread presence of Video Gaming Terminals (VGTs) that dominate other parts of the state. While technically illegal in the city, VGTs are still accessible in some locations. The city and Bally’s are banking on this relative monopoly to generate the revenue needed to justify the scale of the project.

Yet, early concerns are mounting. Bally’s temporary casino is currently generating just over half of its initial revenue projections, raising doubts about the long-term success of the Chicago location. With the city already facing a $1 billion budget shortfall for 2025, officials are relying on casino tax revenue to help fund pension obligations.

Given these financial stakes, it is unlikely that labor unions, construction firms, or business groups tied to Bally’s would support legislation that could undermine the casino’s competitive advantage. If the city or Bally’s pushes back against online casino expansion, opposition from key stakeholders will only grow stronger.

The VGT Factor: A Political Minefield

Another major obstacle to iGaming in Illinois is its potential impact on VGTs. These gaming machines can be found in bars, truck stops, and small businesses across the state. Unlike major casino resorts, which may exaggerate fears of online gambling cannibalization, the threat to VGT revenue is far more direct.

With more than 8,200 licensed VGT locations statewide, many small businesses rely on these machines to stay afloat. In 2024, the average business with VGTs generated over $100,000 in gross gaming revenue. If customers could access slot-style games on their phones instead of visiting local bars or gaming lounges, the financial impact on these establishments could be devastating.

The state is also deeply invested in the VGT industry, collecting 35% of the nearly $2.8 billion lost on these machines last year, before local taxes are factored in. While iGaming could eventually generate significant tax revenue, much of it would come at the expense of an already lucrative revenue stream for both the state and local municipalities.

A Long Shot for Legalization

The combination of opposition from major casino operators, small business owners, and labor unions makes iGaming a tough sell in Illinois. The economic and political risks tied to the industry are simply too great for many lawmakers to ignore.

Unless legislators can find a way to appease these competing interests, Illinois’ online casino bills will likely meet the same fate as last year. Dying quietly in committee before they ever reach the floor for debate.