Even though Illinois has yet to take its first legal mobile sports wager, last week’s executive order could further diminish the appeal of in-person registration in not just Illinois, but more than two dozen states still considering sports betting laws and regulations of their own.
Illinois Sports Betting Details
In 2019, Illinois passed an imperfect, Frankenstein’s monster of a sports betting bill, but it opened the door to legal betting in the most populated Midwestern state, which sparked similar moves across the region.
This system is still in place in Nevada, the first (and for most of the nation’s history, only) state with legal sports betting. It’s intended to increase casino foot traffic, with the idea sportsbook registrants will then wander over to the facility’s bigger revenue generators such as slots or table games.
But the requirement curtails would-be legal players who either don’t know or don’t care about the legality of their sportsbooks. Instead, these players stick with offshore sites or unregulated bookies when forced to register in person. This isn’t as big an issue in Nevada, where registration facilities are seemingly ubiquitous, but it is in Illinois, which has far fewer racetracks and casinos, spread across 58,000 square miles and nearly 13 million people.
For many Illinoisans, including in the densely populated Chicago metro area, this could mean an hour or more drive to the nearest sign-up location. Faced with this barrier, potential customers are likely to stick with their existing, unregulated or illegal sports betting options.
This has played out in states with in-person requirements such as Rhode Island. Roughly half the registrants for the state’s lone legal sportsbooks have finalized the physical registration mandate. And that total just applies to those who signed up for the first place, and not those who didn’t bother with the legal option.
It’s clear Americans are betting on sports. It’s also clear legal entities have to work harder to attract these bettors. In-person sign-ups make this even more difficult.
“In-person registration is bad for online betting. Period. End of story,” said John Pappas of IdeaGrowth, an online gaming advocacy group. “Even a limited suspension of this requirement is a good thing and Gov. Pritzker should be applauded for taking this step. He could truly make a difference for the future growth of sports betting tax revenues if he advocated eliminating the requirement altogether.”
Sports Betting Future in Illinois
Pritzker’s signature, at least temporarily, clears one major such hurdle, even if it does nothing for legal sports betting today.
The Illinois Gaming Board had only approved two casinos for in-person sports bets and none for online wagering when the state shut down its casinos in March due to the COVID-19 pandemic. Even if casinos have online approval, bettors would be unable to wager online thanks to the brick-and-mortar facility’s shuttered doors. Pritzker still hasn’t given them a firm reopening timeline.
The executive order gives online bettors hope, even if the retail facilities have to stay closed. The IGB is set to meet later this month, and that meeting could go a long way for online licensees.
Assuming online sportsbooks can take bets this summer, bettors will likely flock to legal digital betting apps now that they don’t have to travel to a casino first. Colorado, which never had an in-person requirement, garnered more than $25 million in bets in its first month, even with virtually no sports to bet on.
With the NBA, NHL and most European soccer leagues set to resume play this summer, and the lucrative college and professional betting seasons still on pace to begin this fall, Illinois is better positioned to see a quick start to its legal betting market. And should DraftKings and FanDuel, two of the largest sports betting revenue generators in other states, can find a workaround the so-called “penalty box” that was designed to postpone their entry, Illinois could take its place as one of the nation’s largest markets by the end of the year.
This week’s executive order is temporary and could be overruled by the IGB, and Illinois’ registration clause is still set to sunset 18 months after the first master sports betting license was issued. Pritzker’s move yesterday – even if just temporarily – is more important for what it could mean for other states going forward.
As many as a dozen states were expected to seriously consider legal sports betting bills before the pandemic cut short legislative sessions across the country. Instead, Washington and Virginia were the only states to pass codified sports betting bills, while South Dakota, Louisiana and Maryland will put voter referendums on their respective ballots with plans to work out the details in 2021.
In that latter trio, lawmakers will have to weigh serious legislative and regulatory measures if voters approve wagering, including registration requirements. In the meantime Ohio and Massachusetts are still considering bills backers hope can pass this year. In 2021, Kentucky, Missouri, Kansas and several others are excepted to take up sports betting legalization efforts cut short by the pandemic.
All these states would be better served without the registration requirements. Industry stakeholders hope Illinois’ reversal of that policy could help thwart any chance it emerges in further states.
“The evidence is clear that in-person registration is not necessary for a well-regulated market and other states should take notice,” Pappas said.