Illinois Online Casinos

Illinois online casinos represent a massive but unrealized opportunity in a state where land-based operators and legal sportsbooks have set high expectations for their ability to generate tax revenue for the state.

Recent legislative proposals signal a renewed focus on tapping into the Illinois online gambling market. These efforts, driven by fiscal pressures and the growth of alternatives such as sweepstakes casinos, are gaining momentum. However, proponents still have significant challenges to overcome.

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Illinois Sweepstakes Casinos

Sweepstakes casinos remain accessible in Illinois, but the regulatory environment shifted sharply in early 2026. The Illinois Gaming Board (IGB), working with the Attorney General’s office, issued cease-and-desist letters to 65 sweepstakes casino operators, asserting that their offerings violate Illinois criminal law. Additionally, the IGB has stated publicly that unlicensed sweepstakes operators “are not welcome” in the state.

Most operators have not complied with the orders, and major brands continue to serve Illinois players. However, the IGB’s position introduces significant uncertainty for operators and players alike. Players should keep in mind that regulators consider sweepstakes casinos illegal, even though enforcement beyond the cease-and-desist letters has not yet materialized.

The following sweepstakes casinos currently accept Illinois players, although each company’s policy could change with little heads up:

Illinois has not passed legislation banning sweepstakes casinos, but the IGB’s stance makes future restrictions or enforcement actions possible. For a full breakdown of how sweepstakes casinos work, see our detailed guide here:

Despite their legal uncertainty, these platforms offer:

Will Illinois Legalize Online Casinos?

It’s too early to predict with any confidence whether Illinois will legalize online casinos over the near term.

Although Illinois online casinos could generate substantial tax revenue for the state, all legalization measures introduced to date have faced opposition arising from multiple concerns, including:

  • Cannibalization of land-based casino revenue
  • Job losses in the land-based casino sector
  • Social impacts associated with online gambling

Factors Favoring Legalization

The massive tax revenue potential of legal online gambling in Illinois is a strong selling point for undecided legislators.

Tax revenue estimates range from $275 million to $600 million annually, but comparisons to the latest numbers from other states with legal online gambling suggest these figures may be conservative.

With Illinois facing budget deficits exceeding $3 billion and no relief in sight, the nine-figure tax revenue projections from legal online gambling make it an increasingly attractive option.

While lawmakers have floated various proposals to address the Illinois budget deficit, ranging from sales taxes on services to state employee pension reform, online gambling remains a viable and untapped alternative that does not raise existing taxes.

The latest efforts to legalize online casinos in Illinois reflect lessons learned from earlier proposals, particularly by implementing higher tax rates and incorporating employment protection provisions.

Companion bills SB 1963 and HB 3080 (introduced in 2025) included several provisions addressing those concerns:

  • Employment Protection (Initial): Operators that have reduced their workforce by 25% or more since February 28th, 2020, are ineligible for licenses.
  • Employment Protection (Renewal): Similarly, operators that have reduced their workforce by 25% or more since receiving an internet gaming license are ineligible for renewal.
  • Taxes: Taxing adjusted gross gaming revenue at a 25% rate, a significant increase compared to past IL online gambling proposals seeking taxes around the 15% mark.

Challenges to Legalizing Online Gambling in Illinois

Opposition to legalizing online casinos in Illinois primarily revolves around its potential to cannibalize revenue from adjacent industries and negatively impact employment in the land-based gambling sector.

One of the primary hurdles proponents must overcome is the fear that legalizing online gambling in Illinois will cannibalize revenue from land-based casinos and the state’s extensive network of video gaming terminals (VGTs).

This is a significant challenge because the Illinois VGT industry is a formidable political force. Small businesses like bars, truck stops, and restaurants operate nearly 50,000 VGTs statewide, earning almost $3 billion in net terminal income.

Collectively, Illinois VGTs contribute nearly $1 billion to municipal and state tax revenue annually. Unsurprisingly, the industry has a powerful lobbying presence in the state.

Industry groups representing VGT operators and small businesses have voiced concerns that Illinois online casinos will lead to job losses, reduced foot traffic, and decreased revenue.

Keith Wetherell, executive director of the Illinois Licensed Beverage Association, estimates that some businesses could experience 40% declines in revenue if Illinois legalizes online gambling.

“It lowers foot traffic in our establishments. That would be devastating to smaller bars and liquor license holders. A good portion of them wouldn’t survive,” Wetherell said.

“A lot of these are mom-and-pop shops. Gaming helps subsidize health insurance options and keeps people employed. They wouldn’t be able to shoulder that big of a loss.”

Labor unions representing hospitality, casino, and VGT workers are among the most vocal critics of legalizing online casinos in Illinois.

Although public statements from specific unions are rare, representatives from major labor organizations affiliated with groups like the Illinois AFL-CIO have expressed reservations.

Similarly, Keith Wetherell worries that legalizing online gambling in Illinois could impact small business jobs.

“There’s a saturation worry,” he said. “Video gambling allows our members to offset their expenses and employ robust staff. Some of our members say they wouldn’t be open if it weren’t for video gaming.”

Employment clauses in recent Illinois online gambling bills indicate that labor unions are genuinely worried about the issue and are voicing their concerns to lawmakers.

Illinois Online Gambling Market Potential

A report from the Analysis Group estimates that legal online casinos in Illinois could generate revenues of $1.3 billion in their first full year, increasing to $2.3 billion by Year 5.

Under a 25% tax model, those figures would result in roughly $325-$575 million in additional tax revenue for the state annually.

Similar estimates from a Vixio market forecast suggest tax revenue potential between $368 million and $693 million annually.

The following estimates illustrate the tax revenue potential of legal online gambling in Illinois based on the Analyst Group and Vixio forecasts under low, medium, and high tax frameworks.

Note: Excessive tax rates may negatively impact the total market size. However, experiences in high-tax states like Pennsylvania indicate that the increase in tax revenue offsets decreases in market size.

ForecastEstimated Market (GGR)Tax Revenue Under A Low Tax Model
(15%)		Tax Revenue Under A Medium Tax Model
(25%)		Tax Revenue Under A High Tax Model
(40%)
Year 1 (Analyst Group)$1.3 Billion$195 Million$325 Million$520 Million
Year 5 (Analyst Group)$2.3 Billion$345 Million$575 Million$920 Million
Year 5 (Vixio)$2.1 Billion$315 Million$525 Million$840 Million

How Illinois May Regulate Online Casinos

If Illinois legalizes online gambling, regulatory measures will likely aim to balance open-market competition with protections for existing revenue sources and workers.

Based on recent proposals, key provisions may include the following:

Licensing Rules

  • Tethering Requirement: Requiring online gambling operators to partner with land-based casinos or racetracks.
  • Initial Licensing Fee: Recent bills have proposed a $250,00 initial licensing fee, but Illinois could easily go much higher. Some of the state’s earliest online gambling bills sought initial licensing fees of $10 million.
  • Online Skins: Recent proposals would allow casinos and race tracks to operate up to three individual online brands (or “skins”), a more open-market approach than seen in Illinois online sports betting rules.
  • Worker Protection Rules: Making online gambling licenses contingent on each casino maintaining a specified percentage of its current workforce.

Tax Policies

  • Tax Rates: Illinois could enact a flat tax rate of around 25% on adjusted gross revenue or consider a graduated tax model to ensure higher-earning operators contribute proportionally more. Model legislation from the National Council of Legislators from Gaming States (NCLGS) suggests 15-25% tax rates. However, Illinois could also look to high-tax states like Pennsylvania to generate significantly more tax revenue.
  • Revenue Allocation: Allocating tax revenue to a dedicated State Gaming Fund for regulatory oversight, infrastructure, or education.

Diversity, Equity, and Inclusion Requirements

  • DEI Annual Reports: Recent bills from Illinois suggest diversity, equity, and inclusion (DEI) will play prominent roles in any regulatory framework. Illinois may require licensed online casino operators to submit annual reports on their procurement goals and spending for businesses owned by women, minorities, veterans, individuals with disabilities, and small businesses.
  • DEI Workshops: Similarly, past proposals would require each licensed operator to hold an annual workshop/job fair on the current state of supplier diversity.

Responsible Gambling

  • Operator Requirements: Requiring licensed online casinos to provide self-exclusion programs, custom deposit limits, and reality checks.
  • Statewide Self-Exclusion Program: Establishing a statewide self-exclusion program covering all online casinos.

Illinois Online Gambling Legislative History

Illinois has been exploring legalizing online casinos and poker sites since 2013. Although all efforts to date have been unsuccessful, they provide insight into the state’s evolving approach to legalizing online gambling.

In 2013, Illinois lawmakers added language authorizing online gambling and poker to a larger land-based gambling expansion bill (SB 1739).

The bill advanced through a Senate vote but died in the House.

Lawmakers introduced two other placeholder bills (HB 1077 and HB 1078) in 2013, but they made almost no progress.

In May 2017, lawmakers added language regulating daily fantasy sports and legalizing online casinos to an unrelated bill at the behest of local riverboat casino operators.

According to local news reports, casinos in Illinois viewed daily fantasy sports as a competing business model and initially opposed legislation regulating fantasy sports.

However, those casinos had also been interested in expanding to online gambling. They were able to strike a deal with lawmakers and get the online gaming language added to the fantasy sports bill.

In addition to creating consumer protection regulations for daily fantasy sports, the modified bill sought to legalize online gambling and issue licenses to operators.

HB 479

  • Existing casinos, horse racing tracks, and advance deposit wagering operators in Illinois would have been authorized to apply for licenses for an application fee of $250,000, followed by a $10 million licensing fee.
  • Operators would have been permitted to offset the hefty licensing fee against future taxes collected on gaming revenue.
  • The bill was put to the Illinois Senate’s vote in May and passed by a vote of 42-10 but stalled in the House.

Rep. Robert Rita introduced HB 3142, the Internet Gaming Act, in 2021. Although it was a mostly standard piece of online gambling legislation, it did divulge in some intriguing ways.

The bill sought to:

  • Allow casinos and race tracks to apply for online gambling licenses
  • Authorize each operator to offer casino games and online poker, including multi-state poker.
  • Allow each licensee to launch up to three individually branded platforms (skins)
  • Charge a $500,000 licensing fees and tax revenue at 12%
  • Collect a $10 million stipend for problem gambling treatment and research.

But as noted, there were also a few interesting elements in Rep. Rita’s proposal.

The legislation contained an in-person registration requirement for the first six months. The inclusion of in-person registration was a headscratcher considering Illinois removed the same condition for sportsbooks.

The bill also contained language that would fast-track the launch of Illinois online casino and poker sites, but the manner that such an accelerated timeline would be accomplished was questionable, as it imposed:

  • A 90-day timeline for the Illinois Gaming Board to enact emergency rules
  • A 30-day temporary licensing approval process for active online sports betting operators in Illinois

These accelerants didn’t account for game testing and parts of the process that have caused other states to take no less than nine months (New Jersey) and more often 12-plus months to launch online gambling.

Senator Cristina Castro, Representative Edgar Gonzalez, and Representative Johnathan Carroll filed bills to legalize online gambling in 2023. None of the bills made it out of committee during the legislative session.

SB 1656

  • Aimed to establish the Internet Gaming Act to legalize online casino games and poker in Illinois
  • Proposed a licensing framework for land-based casinos and racetracks to offer online gaming platforms.
  • Suggested a tax rate of 15% on adjusted gross revenue from online gaming.
  • The bill faced opposition from various stakeholders concerned about potential impacts on existing gaming operations and did not advance past the committee stage.

HB 2239

  • Filed as a companion to SB1656.
  • The bill contained similar provisions to legalize and regulate online casino gaming in Illinois.
  • Despite efforts to garner support, the bill stalled in committee and did not proceed to a full House vote.

HB 2320

  • Proposed allowing casinos and racetracks to offer internet gaming directly or through partnerships with platform providers under the regulation of the Illinois Gaming Board.
  • Would have imposed a 12% privilege tax on internet gaming revenue, with funds allocated to the State Gaming Fund.
  • Would have granted the Illinois Gaming Board the power to adopt emergency rules to implement the Act.

Illinois’ online gambling efforts in 2024 consisted of Senator Castro and Representative Gonzalez reintroducing two bills from the previous session:

  • SB 1656
  • HB 2239

Neither bill advanced beyond the committee phase in its respective chamber.

Senator Castro and Rep. Gonzalez renewed their efforts to legalize online gambling in January 2025 by introducing companion bills SB 1963 and HB 3080.

These bills proposed:

  • Legalizing online casino games, online poker, and live dealer games
  • A 25% tax rate on adjusted gross revenue
  • Allowing licensees to have up to three individually branded internet gaming skins.
  • Preventing the issuance of licenses to operators who have reduced their workforce by 25% or more since February 28, 2020

Illinois Online Gambling FAQ

No. Sweepstakes casinos are a close alternative, but Illinois has not yet legalized full-scale online gambling.

Visitors must be 21 or older to enter the gambling areas of Illinois casinos.

There’s not enough information to confidently predict when the first Illinois online casinos will launch.

Illinois seems to inch closer to legalizing online gambling every year, but proponents still have some high hurdles to clear.

State regulators assert that sweepstakes casinos are illegal in Illinois, but operators contend that they adhere to all relevant state and federal laws.

Most Illinois sweepstakes gambling sites require customers to be 18 or older, but some have 21+ minimum age policies.

The Illinois Gaming Board provides links to the full text of all gambling laws and regulations here.

The Illinois Gaming Board (IGB) is the most logical choice to regulate online gambling due to its experience overseeing online sports betting, land-based casinos, and video gaming terminals (VGTs).