Illinois Becomes Latest State to Approve Online Gambling

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The Illinois Senate Executive Committee approved new legislation on Wednesday by a 10-4 margin of that seeks to regulate online gambling and also further allow for brick and mortar casino expansion in the state including a casino in Chicago and slot machines in airports and at horse racing tracks throughout the state.

With Illinois’ population near the 13 million mark, nearly three times more than the other three states that have already legalized internet gambling including New Jersey Nevada and Delaware, it would be a huge push for regulated online gambling in the United States.

The proposed legislation creates the Division of Internet Gambling within the Department of Lottery for the purpose of administering, regulating, and enforcing the system of Internet gaming. Games allowed under the proposal include both games of chance and skill. Wagering on sporting events is prohibited as long as it violates federal law.

Like Nevada, the legislation also includes a bad actor provision that restricts the issunace of an Internet gaming license to any applicant that accepted wagers via the Internet in violation of US law during the 10 years prior to their application. Nevada requires a five year lockout period.

Any gaming vendors that supply goods, software, or services to Internet gaming licensees will not be granted a license if they accepted online wagers that have broken any US laws.

There will be a non-refundable license application fee of $250,000. The licenses are valid for a 5 year period and will require a $20,000,000 deposit to be used against future Internet wagering taxes owed. Taxes on fee based games such as poker will be assessed at 7.5% of annual gross gaming revenue on the first $200,000,000 for the initial five-year license term and at 15% in subsequent years. Games played against the house such as blackjack (non-fee based games) will be assessed at 10% for the initial five-year term on the first $200,000,000 and at 20% in subsequent years.

Eligible applicants for a license are limited to those entities that currently hold a valid gaming license in the state including video gaming, horse racing and casino operators.

In an interesting twist the law allows licensees to enter into agreements with other gaming entities, other states and surprisingly even other countries to combine player pools and share liquidity as long as doing so does not violate State, federal or foreign laws.

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